Jon Kruljac, VP Capital Markets, IR
David, this is Jon. I would just liked to add, we really not cookie cutter on anything. We look at every pad, what’s the geology there, and we have a custom design frack with our service providers for each pad for each formation. We’ll be looking at A, B, and C bench going forward as well as Codell pad by pad with some general rules that we are going to apply. We have always been nimble and a fast follower, so we are watching every body.I would just also to say that we probably would like to get another 50 to 100 wells drilled and have six to 12 months of data to really be replanning it even more. We still need more time. As that said in the script, we are the early stages of our horizontal development. We have even got to 5% of our inventory, so there is still a lot of learning curve to go.
David Snow, Energy Equities
Then the standard length that you mentioned is, what is that, and is it less now, you have tighter spacing and less fracks I think so does that — can you bring me upon what the spacing is?
Craig Rasmuson, COO
Instead of a lateral dispute maybe spaced in either a 320 or 640 acre unit and the 640 being a true square. It is about 4,000 or 4,300-foot lateral depending upon. You have to stop shy of your lease line by 460 feet. You do not frack across the lease line and take someone else’s minerals if you will. That is the state regulated on how we work and run our permit.
The standard length then gives you if you are in the 4,000-foot lateral and you do 180/185-feet spacings of your completions, then you are looking at the 22 stages. That is where we have honed in on that just through simple evaluation of what we have done at the 150-160-feet and what we have done at 200 feet. We think the sweet spot from looking at some non-ops and talking to our brother in the basin is going to be that 180 feet.
David Snow, Energy Equities
I thought in your prepared remarks you said that you were reducing the number of states; I guess I heard that right?
Craig Rasmuson, COO
Well, it is, yes. Most recently we have got 150-foot spacing, so that equates to 26 stages per standard length lateral. We are reducing it down by those four frack stages. We are just not seeing the benefit of the increase in production for the capital we put into those extra four stages,so we are finding that sweet spot.
Jon Kruljac, VP Capital Markets, IR
Again, this will also be dictated by geology in the wellbores with seismic and other offset data. Some of these newer wells might have 20 stages. They might have 24 stages probably swinging around that 22.
Just as a clarification, our first pad Renfroe was 18 stages, 220 feet apart, 225 feet apart in the frack stages .Leffler was 20 stages, and then Phelps and Eberle, Kelly, Weld 152 where in the 25 to 27 stages. They have one anomalous pattern there Union, which was shorter link laterals around 3,200 feet because of lease limitation and geology. We kind of throw that one out of the equation. We had gone down to 150 feet and tightened it up getting 26,/27 stages, while a couple of wells that had 26 and 27 stages outperformed, many didn’t and we are really looking at that 22 stages give or take a stage as the sweet spot.
David Snow, Energy Equities
How much is that saving you in running?
Jon Kruljac, VP Capital Markets, IR
Well, it is going to save 200,000 to 400,000 and we are still refining those savings along with other things because it is not just the frack. It is the other thing that goes along with it. There is a sundry of items. We are zeroing in on that as we mentioned before. Our current AFE on the Cannon wells is $.3.3 million. We have about $300,000 of contingencies there. Our experience in the past has been able to drill lower than the AFE and not utilize all those contingencies, but we are sharpening it up and having a much tighter framework. We are looking at increasing our operational performance across the board. It is just not the drilling time. It is everything that goes along with that, David, so stay tuned.
David Snow, Energy Equities
The slick water adds a $1.2 million, did you say?
Craig Rasmuson, COO
Slick water 22 stages is about $900,000 – to $950,000 completion down from about $1.2 million.
David Snow, Energy Equities
Down, okay. Thank you.
