Whiting is "MRI" a rig at a well Maus 23 in Golden Valley ND.
With Whiting's typical 1280 spacing does that mean they basically draw a circumverence around the well for 1280 acres in a circle. Or does the 1280 mean that sharing in production is limited to the property lines between different sections. Maus 23 is 141N 104W South 1/2 Section 22 and I am in South 1/2 Section 27 and all of Section 26, which are basically 1/2 mile from the rig.
I do not have a lease with Whiting nor have I ever received any correspondence from them.
My questions are:
1) do I get a % of the production.
2) On the NDIC Maus 23 file #19917 shows as confidential, how do I find out when they got that confidential status. I suspect they got confidential status Nov\Dec 2010 and because of either weather or some other delays could not get rig up until recently.
NDIC shows the rig symbol finally today.
Any information would be most appreciated and helpfull.
Records show NDIC info. on this well as Maus 23-22 NESW22-141N-104W on record for week ending November 4, 2010. The 1280 spacing will be for two sections and if you research the records on the NDIC website, you will find the original spacing application for this well, which will show what sections is contained. Spacing on sections runs North to South as a rule.
Joel, there should be filters on the upper right side of the GIS map page. One will say Drilling/Spacing. Checkmark the box next to that and you should have the drill spacing for that particular description shaded. Hope this helps.
If you're not leased, call Whiting to iniate the process. Lease prices in Golden Valley weren't as high as in Mountrail, Dunn, or core areas. Though regardless of price, hold out for a 20% royalty (in the past they were offering 15% or a 1/6th royalty) in that area.
As to your questions; No, you don't get a % of production from that well (unless the drill into Sec 26). The "confidential wells" tab on the ND website often shows the date a well scheduled to come off the list (without looking I assume it will be late in 2011).
I'm not sure what is planned for this Maus well. First of all the name doesn't include "H" designating it as a horizontal well. Note it is also not located against a section line (it's in NE of SW). So it's possible it might even be a vertical well to test core their "Big Island" prospect, or to define the boundaries of it. They have already done seismographic work in the area.
Though I don't know what is up. This may be a horizontal well. In the same township (141N - 104W) Whiting combined sections 18 & 19, and sections 30 & 31 into two 1280 acre pools (running north-south). This suggests they might tie section 22 (where Maus is) with section 15. If so, later on they may then look at tying your section 27 with 34 below it.
I too have several unanswered questions. Right now it is exciting to see some action in this part of Golden Valley County. We will have to just sit back and watch as this effort develops to see what Whiting is up to.
Mr. Kennedy is correct in his info. To get to that, click on GIS Map Server; click on Find Section; Put in info on your township/range/section and click on Drilling/Spacing on the right hand side; the color areas are spaced.
Joel said:
thank you charles on website now (with basic subscription) how do I find the spacing, (if the spacing would cover my South 1/2 of section 27 and all of section 26?. Do I map it and then do what?
thanks,
Joel
charles s mallory said:
Joel:
Records show NDIC info. on this well as Maus 23-22 NESW22-141N-104W on record for week ending November 4, 2010. The 1280 spacing will be for two sections and if you research the records on the NDIC website, you will find the original spacing application for this well, which will show what sections is contained. Spacing on sections runs North to South as a rule.
I have to agree with you on your comments that this might be a vertical well for "test" purposes. I don't keep up with the activity in that area but what you said makes sense. I may have asked you before but what's the latest info on activity in Roosevelt and Sheridan, MT. We got a letter from Marathon in regards to temp. spacing on our minerals in Sheridan and I learned from them that plans are to drill one horizontal later this year on our mineral acreage. I'm hoping activity picks up for these two counties later this year or next.
Eastern MT said:
Joel,
If you're not leased, call Whiting to iniate the process. Lease prices in Golden Valley weren't as high as in Mountrail, Dunn, or core areas. Though regardless of price, hold out for a 20% royalty (in the past they were offering 15% or a 1/6th royalty) in that area.
As to your questions; No, you don't get a % of production from that well (unless the drill into Sec 26). The "confidential wells" tab on the ND website often shows the date a well scheduled to come off the list (without looking I assume it will be late in 2011).
I'm not sure what is planned for this Maus well. First of all the name doesn't include "H" designating it as a horizontal well. Note it is also not located against a section line (it's in NE of SW). So it's possible it might even be a vertical well to test core their "Big Island" prospect, or to define the boundaries of it. They have already done seismographic work in the area.
Though I don't know what is up. This may be a horizontal well. In the same township (141N - 104W) Whiting combined sections 18 & 19, and sections 30 & 31 into two 1280 acre pools (running north-south). This suggests they might tie section 22 (where Maus is) with section 15. If so, later on they may then look at tying your section 27 with 34 below it.
I too have several unanswered questions. Right now it is exciting to see some action in this part of Golden Valley County. We will have to just sit back and watch as this effort develops to see what Whiting is up to.
We really need to discuss the oversized spacing units in ND and how they adversely affect and unconscionably and unlawfully dilute the interests of mineral owners. It's a hefty subject.
My question is: How does an oil company decide which 1280 acre spacings to lease. I have interest in two sections north and south of each other that are leased and I assume because the spacings usually run N&S that this is why they chose to lease these two. I also have one adjacent to the east that is unleased and was never confronted to lease it. Sooo, how do they determine which 1280s to lease?
Several factors exists on an operators decision and one is the results of seismic work in the area or the amount of acreage that is available to lease.
Gerald said:
My question is: How does an oil company decide which 1280 acre spacings to lease. I have interest in two sections north and south of each other that are leased and I assume because the spacings usually run N&S that this is why they chose to lease these two. I also have one adjacent to the east that is unleased and was never confronted to lease it. Sooo, how do they determine which 1280s to lease?
DG: I agree dilution in these 1280 and 2560 acre pools is a problem for those of us with small net interests. At times it seems these mega-drilling units are designed to include the maximum amount of acres so a single well can hold it all by production before leases expire. However, the way this has been developing the 1,280 acre pool appear to be the most efficient way to drill the Bakken. In Mountrail and Dunn the "stand up" 1,280 drilling units with north-south drilling (opposed to corner to corner) may ultimately allow for up to four wells targeting the same formation under the 1280 (and possibly more beneath in the Three Forks). So long story short... We (small interest owner) initially receive a diluted amount on well one, yet our return is improved if they eventually drill four wells to produce for our diluted interest under the entire 1280 acres.
Gerald: Typically leasing preceeds the pooling into drilling units. First they decide which Townships (or Sections) may have good prospects then lease everything within their targeted area. Then as they get closer to pursuing drilling they request permission from the state for the "pooling" of lands into these units. This provides for an orderly drilling plan over a wide area (say an entire TWP). Then they decide where to drill first and file with the State for drilling permits...
I've also had a situation where minerals owned in one TWP were leased, while adjacent minerals (though in the next TWP) were ignored. However a year later another company leased them. So depending upon how things develop in your area, your lonesome minerals may have suitors before long.
Thanks much all for the good info. At this point, I must assume because of the current lease and their plan, some activity will come of this. Me, like many others I’m sure, are keeping my fingers crossed.
I don't follow the NE corner of Montana closely. I am sure you read the "Weekly Activity Letter" put out by the MT Board of Oil & Gas www.bogc.dnrc.mt.gov . I only can refer to what I saw there.
I believe you said your Roosevelt Co interest was in 30N-59E and Sheridan Co interest just above? If so, they are working in your neighborhood. I saw a Slawson permit for 29-59 sec 18, an EOG permit in 28-59 sec 24, and some others in Sheridan Co a couple twps north of you. It "seems to me" it is starting to heat up north of the previous Elm Coulee action. Though clearly the bulk of the activity remains in North Dakota.
My best guess is the companies will continue drilling the leases in ND before drilling more on the MT side of the line. They don't have enough days in the week (or rigs) to drill all of both before leases expire. So I assume their drilling plans are structured to drill first where the lease renewal expense would be highest. I think your minerals are well positioned. I don't know how soon, but suspect they will get drilled. Yet maybe you'll get a shot at renewing your lease before they get around to it. What do you think, ask for 30% royalty next time? :)
A 1280 could be fair to everyone if they drilled in quick sucession the wells needed to drain it. But that isn’t what they are doing. the pattern on mine seems to be 1 well per 1280 and some are nearing 4 years old with no second well. It certainly looks like there will be no more wells this decade, on those HBP 1280’s of mine in McKenzie co. I will agree that 1280 spacing is perfectly fine when you tell me the schedule for each of the folowing wells needed to drain those spacings will be drilled. I’ll be waiting right here.
I suspect your experience with one well drilled per 1,280 unit is going to be the norm until "everything" is held by production. This makes for a limited (single well) return of production on our minerals for the foreseeable future.
Though eventually they will get their leases "tied" up and focus on fully developing these tracts. They want the full production on this as much as we do. Unfortunately their schedule may not coincide with what we'd like to see. Yet if the first well drilled was commercially viable, then ultimately they will return to drill three or more wells on each of these 1280 pools.
My best guess is that active Bakken drilling will continue strong for at least the next ten to fifteen years minimum (baring $20 oil prices). For the next four to five years, I suspect there will be 3 "first" wells for every "second" or "third" one drilled. I may be wrong but that is my educated guess based upon the oil companies holding nearly 2,000,000 undrilled leased acres (combined) across the Bakken play in Montana & North Dakota. Count on it, they don't want to replace their 'cheap' leases with higher renewals.
I have been reading a bit about some people adding a sliding scale for royalty in their leases. I think it goes that if you are pooled in an area too large for one well to drain effectively the operator has a set time [ possibly 2 years ] to drill additional wells or your royalty automatically increases by a set amount. IE. if you are pooled into a 1280 with only 1 well with a 20% royalty, if a secod well isn't initiated within 2 years, you royalty would automatically climb to 22.5% or whatever you negotiated it to. I would also want it to retroactive to first production to give it teeth. It may put operators between a rock and a hard place, but they haven't earned any love from me. Not all my wells are atop my mineral descriptions, or have the wellbore passing through them. I don't want to be paid for some other mineral owners oil. I don't want any other mineral owners to be paid from my oil. I want to be paid for my oil. I do not appreciate being dragged into an operators scheme to acquire and hold by production, more producing acreage than they can drain, so they can make a killing later. I don't think that is what my family had in mind while holding onto these mineral rights for the last 5 generations.
Thanks for your input. I totally agree with you about the drilling activity for Roosevelt both current and future. It would be nice if a top lease or just re-lease is in our future as it would be to our advantage. I love the thought of 30% but I think that would be just wishing. Who knows, as the $/bbl increases, so will things on the other end. Just have to wait and see. Thanks again!!
Eastern MT said:
Mr. Mallory,
I don't follow the NE corner of Montana closely. I am sure you read the "Weekly Activity Letter" put out by the MT Board of Oil & Gas www.bogc.dnrc.mt.gov . I only can refer to what I saw there.
I believe you said your Roosevelt Co interest was in 30N-59E and Sheridan Co interest just above? If so, they are working in your neighborhood. I saw a Slawson permit for 29-59 sec 18, an EOG permit in 28-59 sec 24, and some others in Sheridan Co a couple twps north of you. It "seems to me" it is starting to heat up north of the previous Elm Coulee action. Though clearly the bulk of the activity remains in North Dakota.
My best guess is the companies will continue drilling the leases in ND before drilling more on the MT side of the line. They don't have enough days in the week (or rigs) to drill all of both before leases expire. So I assume their drilling plans are structured to drill first where the lease renewal expense would be highest. I think your minerals are well positioned. I don't know how soon, but suspect they will get drilled. Yet maybe you'll get a shot at renewing your lease before they get around to it. What do you think, ask for 30% royalty next time? :)
You are dead on right! At the end of the day, these very expensive wells will be drilled on the operator's best geologic prospect with the highest probability of finding reserves that they have been able to lease. Its the profits from other production that allows them to risk those profits to continue in business. Treat them fairly. If they want to hold resources for future exploitation by filing large drill spacing pooling permit aps, that is good for their future and, correspondingly yours in the long run. The mineral owner is just along for the ride so must protect himself in who and how he determines lease terms. Mineral Economics 101
Eastern MT said:
To Gerald & DG:
DG: I agree dilution in these 1280 and 2560 acre pools is a problem for those of us with small net interests. At times it seems these mega-drilling units are designed to include the maximum amount of acres so a single well can hold it all by production before leases expire. However, the way this has been developing the 1,280 acre pool appear to be the most efficient way to drill the Bakken. In Mountrail and Dunn the "stand up" 1,280 drilling units with north-south drilling (opposed to corner to corner) may ultimately allow for up to four wells targeting the same formation under the 1280 (and possibly more beneath in the Three Forks). So long story short... We (small interest owner) initially receive a diluted amount on well one, yet our return is improved if they eventually drill four wells to produce for our diluted interest under the entire 1280 acres.
Gerald: Typically leasing preceeds the pooling into drilling units. First they decide which Townships (or Sections) may have good prospects then lease everything within their targeted area. Then as they get closer to pursuing drilling they request permission from the state for the "pooling" of lands into these units. This provides for an orderly drilling plan over a wide area (say an entire TWP). Then they decide where to drill first and file with the State for drilling permits...
I've also had a situation where minerals owned in one TWP were leased, while adjacent minerals (though in the next TWP) were ignored. However a year later another company leased them. So depending upon how things develop in your area, your lonesome minerals may have suitors before long.
I can not see how using my oil to pay someone else so that their minerals are held by production would benefit me. I think it may be debatable, whether the mineral owner who is being paid from my minerals, might rather their lease expire, so they could lease again at better terms and possibly a higher rate in the future. I would rather my minerals outside the effective drainig radius of the well and bore, not be held by production. I don’t think you can have it both ways. If you say I am getting paid early for my minerals outside of actual productive area, it’s still only a diluted fraction, which doesn’t interest me. In the cases where the well and bore are atop and pass through my minerals, my oil is being used to hold others acres, from which I probably won’t see any income from for at least a decade. This is not a good deal to me. What would you think if someone took 80% of your yearly income for 10 years, and gave it to someone else, then they drill another well, and you just start getting what you should have received from the beginning, and you have to wait for the 3rd and 4th wells to start getting back what was taken from you in the first ten years. Anyone who thinks that is a great deal let me know and I will set up an account and you can start sending me 80% of your income. You can stop sending the checks in ten years and it probably won’t be but a few more years before you start getting back what you gave up in the first ten years. That’s a good deal, really?
This is exactly how I feel and that’s why I’m applying to the NDIC to decrease the size of spacing units and establish proper spacing over the Bakken Pool. I have put a ton of effort into researching the subject matter and writing the application. I hope all mineral owners in ND will join my application. Will provide you with a copy and intend to file application early next week.
r w kennedy said:
I have been reading a bit about some people adding a sliding scale for royalty in their leases. I think it goes that if you are pooled in an area too large for one well to drain effectively the operator has a set time [ possibly 2 years ] to drill additional wells or your royalty automatically increases by a set amount. IE. if you are pooled into a 1280 with only 1 well with a 20% royalty, if a secod well isn't initiated within 2 years, you royalty would automatically climb to 22.5% or whatever you negotiated it to. I would also want it to retroactive to first production to give it teeth. It may put operators between a rock and a hard place, but they haven't earned any love from me. Not all my wells are atop my mineral descriptions, or have the wellbore passing through them. I don't want to be paid for some other mineral owners oil. I don't want any other mineral owners to be paid from my oil. I want to be paid for my oil. I do not appreciate being dragged into an operators scheme to acquire and hold by production, more producing acreage than they can drain, so they can make a killing later. I don't think that is what my family had in mind while holding onto these mineral rights for the last 5 generations.