Medusa

August 12, 2019

 

In Greek mythology, Medusa (/mɪˈdjuːzə, -sə/; Μέδουσα "guardian, protectress") was a monster, a Gorgon, generally described as a winged human female with living venomous snakes in place of hair.

 

 

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Surge Energy out of Canada, actually a Chinese company, got the MSM's panties all in a bunch recently with the announcement of the longest lateral yet drilled in the Permian Basin, the Medusa 'C' 28-09 No. 3H well in the Wolfcamp A bench of Borden County, Texas. It's a long sumbitch, for sure, and wanders around thru 3 1/2 sections. But it does not hold a candle to extended reach stuff all around other parts of the real oil world. But shale oil cheerleaders and "technology" believers are all excited about this well and yet another hope in the long list of other shale oil hopes. 

Latshaw Drilling Rig 10 is the proud parent of the Medusa

C-3H well. It was drilled to 7,102 feet vertical depth and its lateral is 17,935 feet long, for a TMD of 24,592 feet.

Latshaw knocked it out 

in supposedly just 19 days.

It was frac'ed with 52 stages, nearly 40,000 pounds of frac sand that I estimate took almost 11,000 bbls. of water, most likely all fresh water that could otherwise be used for homo sapiens, growing stuff and watering critters that make good t-bones. Surge, I am told, uses 100% recycled produced water to frac with, however. I hope that is right.

 

No word on what this  puppy cost but based on other

frac costs in that part of the world per pound I am guessing total wells costs will be in the $11-12MM range, minimum. 

 

 

 

 

We need to keep our eye on this "monster" because, as they say, bigger is not always better and the first two Medusa wells, located next door to the 3H and down the street from some wells called "Leviathan," are not going to go down in the annals of Greek mythology. In fact, the first two wells suck: 

       Shaleprofile.com realized production via Texas Railroad Commission, Medusa 'C' 1H & 2H wells. 

 

 

The 1H well, above in dark blue, is a disaster and the 2H, in light blue. is much better but still won't likely ever payout. After eight months the two wells combined now produce 191 BOPD and have cumulative production of 79,000 BO and some really low price, or no price, associated gas.

 

At $55 gross WH oil prices, 25% RI burdens and typical water production per BO in this part of the Midland Basin, $25 per BO take home pay is a pretty good number. Divide that by the cost of the well  and you can decide if this is a money maker or not. 

 

Remember, the  shale oil industry has taken to not including acreage costs in well economics and refer to those costs as "sunk," as thought they do not exist. Concho "sunk" $79,000 per acre into some crap it bought from RSP in 2017 and they just had the worse quarter of earnings, ever. ALL costs, count. Nothing is sunk and forgotten  when you are up to your ass in long term debt.   

 

 

 

 

 

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