HBP or"Help by Production" can be a very tricky thing to try to prove that production is not going on at some rate. The company holding leases in this manner will do all that they can to hold to leases in this manner. Records of production will be hard to obtain by a party wanting the lease released.
In a hot play such as the Woodford shale a company holding a lease where the reserves are all bu gone is hoping for a larger company that will drill the deeper levels to come to them with what is known as a request for “farm our=t”. This means that a company like Devon would have the right to drill for the Woodford and pay all the expense. The company holding the HBP would negotiate an interest in the well or wells that would be not be a cost to them. For the royalty owner there is no difference in who drills and produces the well. Their loss is in not being able to collect a lease bonus for the new driling. This “Farm in” is a common practice spread across the indursty for many years.
At the top of this page ther is a very good representation of the play for the Woodford. Blaine is in it and is probably where they can get liquids along with the gas. There will be a Blaine County group that you can join and find out a more details from members holding mineral acres there.
Your description is in the NW part of the county and the activity might be low now. Hopefully for all concerned the play will expand and results will be positive. Lot’s has to happen and it will take time.
Lanny I have mineral rights in Dewey county in the first section west of Blaine Co line. It is just SW of Eagle City. We have a well that was completed in early July and is producing both oil and gas. I am originally from Canton so know the area you are talking about.
It has been 6 months and Continental still has not sent our papers. They did say they pay interest after 6 months. I got a contact name Friday that is handling our papers. We have left 3 voice mails but she has not returned any. I emailed the royalty dept. today and they responded with the email for the lady handling ours. I sent her an email but no response yet. I told her I was representing 6 family members so as not to have 6 different people calling. Hopefully we will hear something tomorrow. I feel we will get this month but that means no check until Feb. Oh well it should be a good one.
Larry, the wait may be longer than you think. All of this shale play activity across the U.S. has caught the energy companies unprepared. It takes trained people to process these payments to royalty owners. With the land interest owned by so many individuals the amount of royalty checks being delivered and going to be delivered probably runs in to the tens of thousands if not many more in Oklahoma and Texas alone.
There are just not that many trained people in the industry to process all of this in a timely manner. Furthermore you can’t go to your friendly temp help spot and hire an extra 50 or 100 temps to get you over the “boom period” all of these development go through.
Don’t be surprised if that contact does not call you back. She has got her hands full about 10 hours a day if she is doing her job right. The companies will not increase their staff to cover these boom periods because they know they will end at some point in time and those employees hired to help out will have to be fired.
I could really use some advice. I have interests in Blaine County, Section 31-15N-11W. My mother leased it to Continental through SoDak Properties , May 28, 2008. It was a 3 year lease with a 2 year option. Ownership was transferred to me September 2009. The 3 year lease expired May 28 this year. A different landman sent a check to exercise the 2 year option. The check wasn’t sent until May 31 and delivered June 1st. I contacted the landman and told them the deadline had passed and the lease was no longer in effect. I let them know the amount that they sent wasn’t enough and that I would consider a reasonable offer to lease. Their reasoning that it wasn’t late, was that the check was dated May 26th before the deadline had passed. I told them that would be like me telling my credit card company my payment wasn’t late because the check is dated before the payment is received. On June 7th, after my first contact with them, they filed a memorandum of lease extension stating the lease is owned by CR. It is now 8 months later. What else can I do since the landman has passed me from one person to another?
I bet they would be happy. I have had such situations where they offered to fly someone in to hand me cash If I would just sign a ratification. I wonder why they want to help me so badly?
I have 20 acres of mineral rights in Washita County Oklahoma. It was leased in 2008, and now the lease has expired. I am now out of the loop so to speak about the level of activity in Washita County. Is there any drilling? How about leases in the area? Since the lease expired in June 2011 I have had two offers to buy, but no offers regarding leasing. I would prefer to lease. One last question: Is Washita County considered to be part of Cana Woodford Shale? I live in Astoria OR now. Prior to that I was active duty Army, and I also lived in the State of Alaska so I am not current on developments in the oil and gas field. Any information you may provide will be appreciated. Thanks, Dan Baergen
If you go to the top of this page you will see different sections of this forum. Under the County Groups you will find Washita County. There is discussion in that group but there seems to be no “hot” activity.
Being a Geologist I can answer your question about being in the Cana Woodford shale. Washita County in not in the main part of the play. It is in an area where the Woodford shale is deeper than in Canadian County where the heart of the play is. That does not mean that there is no possibility of the Woodford production there. It will be deeper and therefore more expensive to obtain production. The County is in an area that would produce dry gas with no or very little liquids. With the price of natural gas around $3 per thousand now in the middle of winter, operators are not going to a lot of effort to drill a deep well with dry gas prospects.
The offers to buy are in anticipation of activity in that area. Can you say what they are? There are rumors of $8000-10000 an acre in the heart of the play where there are as many as 9 wells per section being proposed. Where I am in Grady with a few acres and a producing well down in the adjacent section I turned down an offer of $2400 and acre. The less the drilling activity around your mineral acreage holdings the less an offer will be.
Click on the Washita County tab and read those posts and ask some questions. You will have to join that group as you did here.
Larry, my sisters and I have a well in Blaine County in 17-15N-12W drilled by Continental, which started producing in September. Continental says we will have division orders by the end of February. After reading about your well, which started producing July 2, and still no division orders, I wonder about what Continental told me. Did they tell you they would pay 12% interest? Lanny, this well produces both gas and oil and is southwest of Watonga
The check became null and void November 28, 2011. That’s what the last letter from the landman told me. However, they would be “happy” to issue another for the same amount. This was sent UPS Express!
Lori, Continental’s original estimate on your well was 58 days, so unless they ran into problems I would think it would be completed by now. They estimated mine at 68 days but it took them about 80 days to drill and they are not due to start fracking for another three weeks. At that rate it will probably be about 120 days which is about what yours has been already. As busy as they are I doubt if anyone is running on time. There has been a shortage if water for fracking, plus I believe all avaliable rigs are working and fracking crews are working 24/7. See what Don Underwood wrote below about the delay in paying royaltys.
Michael, thank you for your response. I have resigned myself to the fact that I probably won’t see royalties for many months, but I am trying to stay informed as to the status of the well. I’m really new to all this and trying to learn as much as I can to protect myself. The information you gave me was more than I knew about a projected time line. I appreciate your help and the willingness to share knowledge. Thanks again.
Michael, thank you for your kind offer. I have been to the OCC website and really have trouble navigating through it. I have figured out the well search part, but thats about the extent of my OCC savy. I doesn’t seem very user friendly to me, but I don’t have enough knowledge to know what to look for. I’ve played with it a bit hoping to stumble onto something, with no luck. I will keep playing with it, but would appreciate anything you might see while you’re there. Thanks again, Michael!!!