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Was forced pooled one year ago, at18.50 percent royalty for 1.50 acres not sure what production is on current well as I have not yet received royalty check, this well is at one of the deepest shale deposits. The current lease is for about 2.5 more years.
Your lease might have 2.5 more years in it's Primary Term, but if you will read your lease carefully you will probably find that once production is established, the lease will remain in force until production ceases.
That might be 40 years from now.
We can't provide you with anywhere near an accurate estimate of what your interests might be worth without knowing what State your lands are in.
Charles...he provided township range and section (17N 12W S32), Blaine County, Oklahoma over pressure window of the STACK Meramec play.
As you were pooled, you are HBP’d and there is not a primary term.
Carrera completed the Hershey on 5/29 in the Meramec - it usually takes around 5-6 months to get division orders from the operators these days, with first checks following shortly thereafter.
With 1.5 acres at 18.50%, you would have an NRI of 0.022% of the 1,280 acre unit. The unit covers Section 29 and Section 32.
Carrera reported two initial tests for the well, one of may 29, and one of July 10.
The 1st test shows 1135 BOEPD - 416 bopd, 4302 mcfd, 3600 #'s of shut-in pressure, 2850# of flowing pressure.
The 2nd test shows a material drop to 489 BOEPD - 182 Bopd, 1844 mcfd, no report of shut-in pressure, 350#'s of flowing pressure. The opened the choke up almost double the original test.
The notes in the completion report indicate that there was an issue running production casing over the last 3500' of lateral and had to complete open hole. I've included the note before. Essentially, this resulted in an ineffective completion and explains or provides a reason for the sudden production drop.
Overall while this result is a negative for the valuation of your minerals, it is not the end of the world. As I indication in my response on the next page, Devon completed the Faith Marie well 2 miles to the east with an IP of 5100 BOEPD, with a projected 30 day rates of 4500 BOEPD comprised of 2990 bopd and 9660 mcfd. Note that while the drop was 600 boepd, the well maintain a solid rate. I think that acquirers will look to the Faith Marie to compensate the poor results from the Hershey well. The other negative, is that while Carrera has a talented team, as a PE backed group they are designed to delineate and flip their acreage, and therefore the likelihood of density drilling is reduced.
One of the largest impacts on mineral valuations is anticipated timing to full development. With a PE group, this likelihood is stretched out. All in the mix of components will put the value of your acreage in a range – supported on the downside by the strong performance of the Faith Marie well to the East, with a cap driven by the fact the operator is a PE shop and hence a delay to full development as well as the partial failed completion on the existing well.
The following is an excerpt from the completion report.
Were unusual drilling circumstances encountered? Yes Explanation: COULD NOT RUN 5.5" PRODUCTION CASING BELOW 15,947 FEET. DRILLED OUT SHOE TRACK AND EXPOSED OPEN HOLE 15,947 FEET TO 19,568 FEET.
FRACED OPEN HOLE WITH 239,989 BARRELS FW + 1,236,007 POUNDS 100 MESH AND 6,940,386 POUNDS 40/70 PRIOR TO CASED HOLE PORTION OF FRAC.
CASED HOLE PORTION OF FRAC 15,947 FEET TO 10,740 FEET (34 STAGES). CASED HOLE PORTION OF FRAC USED 352,134 BARRELS FW + 2,975,760 POUNDS 100 MESH +9,926,440 POUNDS 40/70 SAND.
TOTAL SAND 21,078,593 POUNDS.
OK. I'll send your legal description to a friend of mine and ask her what she thinks they're worth.
Is the 1.5 acres the surface acreage or your net mineral acreage?
Net mineral acres
I should have asked before: How large is the surface tract?
Looks like a good well , it was completed 5/29/17 and came in @600bopd and 6146 mcf of gas. You should have division orders by now and first check real soon. Did you sign division order and send it back?
Hang on! Too bad you did not negotiate a better lease. You have basically sold 81.25% of your interest.
I find your comment interesting as if Mark didn't take the royalty and bonus, and instead participated with his minerals he would have been on the hook for the CapEx associated with the well. His alternatives, were less cash up front with a larger royalty, which would have been a good thing, even considering the poor well results or participate.