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Reeves County, TX - Oil & Gas Discussion

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Reeves County, TX - Oil & Gas Discussion

Oil & gas discussion group for those interested in Reeves County, TX. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.

Members: 725
Latest Activity: 11 hours ago

Discussion Forum

Silverback Cadillac 4-82

Started by Kerry. Last reply by Dusty yesterday. 2 Replies

Does anyone know if silverback's Cadillac 4-82 1Hin blk4 sec82 was ever drilled?Continue

Mineral rights offer good or bad

Started by David Collins. Last reply by David Collins on Wednesday. 18 Replies

Can anyone tell me the going rate per acre for selling mineral rights in Reeves county.  I have a small and I mean small piece.  I had an offer of $1000 for .12 acres.  I've had this for 30 years and…Continue

Acreage trades?

Started by KGCW. Last reply by Travis Rall on Monday. 2 Replies

I own some acreage in the Delaware Basin and was thinking about how some diversification would be nice.  I'm not interested in selling any of my minerals but would definitely be interested in trading…Continue

LEASE PRIMARY TERM and OPTION

Started by JT. Last reply by Stephen Watkins on Monday. 14 Replies

Hello Reeves County,Is anyone willing to weigh in on the pros and cons of lease "term" and the option or not having the additional option to be pick up. On a 3 year primary "paid-up" oil & gas…Continue

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Comment by TennisDaze 11 hours ago

Louise, It all depends on the location and shape of the mineral tract.  Is the tract a long rectangle or a square or an angle?  Your lessee may want to drill a 2-mile lateral and may need to pool your 477 acres with adjacent land or maybe want to divide into 2 different units.  The related well may or may not need a location on your tract or it could be at the opposite side.  You can talk with the landman at your lessee and ask about plans.  Look at surrounding lands and see the most likely position of any well. 

Comment by Louise Welch 12 hours ago

Thank you, Charles Emery Tooke III and TennisDaze, I truly appreciate your help in the matter of Pad. What I was really asking is this:

What are the advantages and disadvantages of a Pad for another company on my land? I have undivided land and I own 1/2 of the 477 and two other people own the other half.

Have a good company that plans to drill on our land in 2018 and am concerned if the small amount of land might hinder them being able to drill a horizontal. If it wouldn't hinder our drilling then I could go forward with the Pad if desired.

Just wanted to know the advantages or disadvantages.

But, once again, thank you all for your valuable information. You all have really been a great help.

Louise

Comment by TennisDaze 12 hours ago

I agree with Charles that Louise should consult an attorney who is experienced in ROW and able to draft a detailed legal agreement(s).  There are many considerations and issues that should be addressed.  It is often best to have separate agreements for pipelines, electric lines and sites for wells or compressors or frac pond.  The problem with most comprehensive agreements is that there is a single payment for an ability to install multiple lines - and in the end the landowner is short-changed in terms of overall compensation.  Also, some elements outlast others - an electric line or road may continue in use to other properties long past the existence of a well.  It is important to ask a lot of questions and get all the details to put into a written agreement.  We all like simplicity, but too often we find out later that plans were more complicated than first described.  For example, think of a SWD well.  It needs a site and a per barrel disposal price.  But will saltwater arrive by roads?  Then over whose lands and how many roads in how many directions?  How many trucks per day?  Who will take responsibility when the truck leaks water all over the ground?  Will saltwater arrive by pipeline?  How many pipelines and from what directions and whose property is involved?  What about electric lines to run the operation?  Is it on-lease or off-lease water?  It is only water from your responsible operator or a commercial operation with water from all over?  There are a lot of moving parts and the landowner should take the time to gather as much information as possible. Be wary of a blanket agreement for a single payment, unless limited to installation of X, Y and Z and with the stipulation that if the grantee wants to add A, B and C, then it needs a second or amended agreement.  And go and inspect to see if the property is being maintained and that there are no spills and messes.  Do be wary of an attorney who tells you that more dollars is the only issue and the terms of the agreement do not matter. 

Comment by J. Lynn Hansen 15 hours ago

Does anyone have info on when we'll hear anything about the Fury wells Apache is drilling? Many thanks.

Comment by Charles Emery Tooke III 15 hours ago

Please forgive me for the repeated passages. 

Comment by Charles Emery Tooke III 15 hours ago

Louise, 

Please be patient with us. We all mean well, but sometimes we, the people who respond to postings on The Forum, neglect to remember that we are advising Real People. 

Everything that TennisDaze has written and advised you is very valid. He or She is one of the best of the best of those who respond to questions people like you post on The Forum. 

But sometimes we all get a little more complicated in the way we try and explain things to people than necessary. 

No Offense intended, TennisDaze. 

Louise, I think it would be absolutely best if you consulted someone to help you with your negotiations regarding an "Off Site" location on your lands. 

Wade Caldwell, an Attorney out of San Antonio, is a well qualified Attorney and a frequent Contributor here on The Forum. 

I think you should, at the least, spend a few minutes with him before you make any decisions. 

Comment by TennisDaze 17 hours ago

Louise,  You need to gather and provide a lot more information for advice. 

1)  Is this for a well to produce your minerals or is it an off-site location to develop other minerals only?

2)  Note that the key in the rate and damage schedule is total vertical + horizontal wellbore length, not the pad size.  The $7,200 for up to 90.000 sf is only for a well no deeper than 4,000 feet.  If this is for a horizontal well, then it will most likely be over 13,000 feet (vertical + horizontal) and then the damages are $20,800.  If the pad exceeds the listed 250,000 sf, then you should be paid per sq foot extra - at least $0.08 per sf.

3.  Roads and electric lines are extra.  Road for on-lease minerals is $24.00 per rod and off-lease road (use easement form) is $40.00 per rod.  Utility line prices depend on electric capacity.  And additional payments are due every 10 years.

4.  If this is an off-lease pad, then you should be paid for pipeline ROW for the total length of the well pipe from surface down to the point where it crosses under someone else's surface.  At 11,000 feet for vertical pipeline, this can add up.  Again, you can require renewal payments every 10 years.  At off-lease pipeline prices.  Think of this as 667 rods at $64 per rod (6 inch to 12 inch) = $16,008 and renewal at another $48 per rod.

5.  Why are you receiving 1/2 of payment?  Do you only own 1/2 of surface?  If this is mineral classified land, then you only split with the State of Texas for an on-site well pad.  Any off-site well pad revenues are due 100% to the surface owner.

6.  Depending on where your surface is located, the depth of fresh water will vary and so will the costs.  I do not have experience with getting this.  But if they want to use any of your water, then they need to pay for it.  Brackish water has value.

7.  Total remuneration can be quite substantial for an off-lease pad.  You need a good easement and well pad lease form with legal protections requiring restoration of surface and clean-up of damages.

Comment by Lawrence Rayburn 17 hours ago

Anadarko to cut spending elsewhere to drill in West Texas. "Anadarko Petroleum Corp. plans to reduce spending in the oil patch next year, focusing on drilling sideways wells in the Delaware Basin in West Texas, the DJ Basin in Colorado and the Gulf of Mexico. The Woodlands-based oil explorer said Thursday it will spend $4.2 billion to $4.6 billion in capital expenditures in 2018, down slightly from a budget of $4.5 billion to $4.7 billion this year. Eight out of 10 dollars spent in the oil patch will go to one of the company's three key plays – the Delaware, DJ Basin or the Gulf. Anadarko expects to see a 20 percent return on the cash it invests, while also boosting oil production growth 14 percent over the prior year." More at Chron.com.

A LOT more wells to be drilled by Anadarko in the Mentone to Orla

area and west into Culberson and south Reeves to the heart of the southern Delaware basin. 

Figured you'd want to know. 

ol' Lawrence near Verhalen  

Comment by Louise Welch 18 hours ago

Thank you all for the valuable information on the problem I have had with the pad. They must be very interested as they drop the process a couple of weeks ago. Now they are back. Another package they are sending me. I have not communicated with them since. They sent a couple of messages to me and said they were sending a new package. I was wondering if it is beneficial to me or not. We only have 477 acres. They are not the company we are leased to. And not sure if that would hinder our company drilling a well.

Just want to know the advantages or disadvantages of permitting a Pad on the land. Any and all information will be helpful.

Thank you guys for the quick response...it is appreciated.

Louise

Comment by Charles Emery Tooke III 19 hours ago

Hi Louise! 

The $7,200 for a 90,000 sq ft pad site they are using appears to be from the University Land Board's Rate and Damage Schedule:  Rate_Damage_Schedule.pdf

Many people are using the schedule, because the University Land Board is considered a very trusted institution, but as you read through it you will find that the quoted amounts are minimums

Also, note what the schedule says regarding damages for roads.

You can negotiate to have permission to use their roads.  For where the roads will be built (Down the center of your property for future property development? Along one boundary line or another to minimize interference with normal operations?).  You can even require them to re-surface the roads and re-dig the ditches so often, including one last time before they pack up and leave. 

And do not neglect to address the issue of drainage. If they build a road that interrupts the natural drainage, they can really mess up your lands. Have them install culverts where necessary to prevent that sort of thing. 

Cattleguards and their own gates, too. They will probably want to install "Push Gates" so their drivers don't have to get out and unlock every gate they come to. 

Fences around their facilities. 

All kinds of things to be considered. What do you use the land for now? 

The Pad will be tied up until any successfully completed well(s) stop producing.  That could be 30+ years, possibly over 40+ years. 

If you are growing crops or using it for stock grazing, you will lose the use of the land for that long. 

If they propose to drill a water well, make them drill it to a water table not presently being used on the land.  Leaving it when they pack up and go will not cost them anything.  Their surface equipment is not designed for farm or ranch use, but they can certainly leave the pipe in the ground for nothing. 

You wrote that the Pad was going to be used by another company.  That is not unusual because in drilling horizontal wells they want the horizontals to pass through as much of the producing formation as possible.  Starting from several hundred feet away from their lease lines, they can begin perforating the horizontal pipe almost at their boundary line. 

Since the wells planned for the Pad apparently do not include your lands, you apparently do not stand to receive any royalties from them.  Many times, however, I have seen where "Off Lease" surface owners such as yourself have successfully negotiated for an overriding royalty in the other company's wells. 1% or 2%. 

Have you thought of having someone assist you in your negotiations? 

Hope this helps - 

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

 

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