Cotton Valley Lime (Oolitic Shoal) Play

Cotton Valley Lime
Introduction
Production Characteristics
Production Decline Curves
Geology
Analogue
Economics

Economics

Typical drilling and completion costs are $1.5 million. The probability plot shows that there is relatively low risk in making an economic well. The occurrence of H2S raises operating cost, such that an amine plant is reported to cost about $0.90 to $1.00 per standard cubic foot of gas to process and clean for pipeline sales.

A model with the following assumptions was constructed:

$1.95 million of up-front cost
A 2.55 BCFGE Cum over twenty years
$36 oil price over the life and $4.25 gas price

This resulted in a well with a 1.4 year payout, generating an additional $3.2 million dollars of discounted cash flow (at 10%). The internal rate of return (IROR) is just over 50%. A cash flow spreadsheet may be downloaded if needed (see cvl_cash.xls).