Larry Trook—Thank you, Larry, for your response. With the Woodford shale being so active, I doubt that a letter would cause much concern, as Don mentioned. However, it would probably be my first step if i have to engage a lawyer.
Hi Don U.—Nice of you to rrespond once again. It is so generous of you to devote the time and energy to share your wealth of knowledge with those of of us less informed. It is appreciated,believe me.
The current operator is LINN ENERGY.(There have been a few) I have no problem with them. It is the age of the lease and the terms that were in vogue in 1976. The depth of the well is just short of 14,000 ft. vertical. I am not sure of the formation. The well is located in 24-12N-13W just SE of Hydro about 2 mi. The area around the well was pretty active before the price drop. According to LINN this activity has reduced the pressure at my well thus lowering the production further than it was. LINN’S production engineer said that they planed to puta compressor at the well head as soon as they prepare the well head, hoping to boost the pressure and the production. My last royalty check was for production thru Jan 2012. Since Jan. the royalty payment has not reached the $50.00 minimum.
I was hoping to find that the Habendum clause only applied to producing wells and current active drilling. I think this area needs some current thinking. Leases should take into consideration the technology advancement as well as inflatiion or deflation should it ever happen in the energy sector.HBP sucks.
Again, thank you for your insight.
Michael or Ron, could you please look at section 34-14n-9w in Canadian county eaglerock filed an emergency hearing that was supposed to be this past Tuesday and I was wondering what happened, if they got approved etc. thanks
William- I am trying to locate Hydo in the geologic picture of Oklahoma. Are you in or around 12-13N-11-12W? The comment of the operator about nearby wells lowering the pressure could mean that your well, at 14,000 feet, is in the Woodford shale. Are there horizontal wells nearby?
Take a close look at the map at the top of this page and try to locate your property in relation to that. I think you are more toward the red zone to the west. That would mean that a well in the red zone could be expected to produce dry gas without much liquid content.
If that is the case operators will be slow playing that area for a while with the price of gas at $3. $3 gas versus an $11,000,000 well does not work out to well.
I have a prospect in South Texas I am trying to place to get drilled. It is as large as any of the Woodford shale wells and at about 9000 feet. A well will cost $2,500,00. Ten or twelve wells could be drilled on the leasehold of about 2100 acres. A well there will produce about 30,000 barrels of oil per BCF produced. Business is slow for that proposal.
Back in the 80’s my Dad had a well producing very little and was not producing continuously. He had a lawyer write the company a letter and they abandoned the well and he got a good lease right after that. He had a deal with the lawyer to pay him a per cent of whatever lease he got so lawyer would not get paid unless he was successful.
Thanks Michael and Ron, Eagle Rock has 4 wells staked on 2 pads one is in the southwest quarter and the other is on the northeast quarter. I’m just trying to keep on top of what’s going on.
Cheryl, Thank you for posting that question, that is a part of the site I have never looked at. Very useful information. I think, not sure, that Pro. means Protest. I looked up the judicial case files on 2 of them that had Y and they both had a record of a protest being filed in the case.
David It looks to me like they moved it to Aug. 7
David, There were 2 applications for Location Exception, first one said “matter was DMOA, Stack(the attorney) to prepare motion”. The second one said hearing scheduled for 8-7-12. There was one application for Increased Density it said hearing scheduled for 8-7-12. The Spacing and Pooling orders were approved in July 2011. I don’t know why there were 2 apps. for Loc.Excp. and I don’t know what DMOA means. Maybe that motion was dismissed and the other one took it’s place. Sorry if I’ve given you more questions than answers. Maybe the emergency is they have run out of time on their Spacing and Pooling Orders.??
Could it be “Dismissed Motion On Appeal” ?
Is it normal for a mineral lease contract to ask for your “riparian rights” ?
Don U.—the subject well is at 24-12N-13W, the northern part of caddo cty. I also own rights in Blaine Cty, 16-13N-13W aand 26-13N-13W. These both have dry horizzontal gas wells brought on line in 2012.They are just to the NE of the Caddo well which is also a dry gas vertical well. The Blaine/Caddo cty line runs through Hydro. It looks to me like all three are in the Woodford Shale. I suspect the activity around the Caddo well is horizontal drilling.
As an amature in this business, i would think that a vertical well that has produced for 31 years that the ajacent area would be a good prospect for todays horizontal drilling. Therein lies my concern. to have it happen with a 1/8 royalty just does not seem like a fair shake.
Michael H…thank you for the answer…protest makes sense.
William-If the verticle well that is producing out of the Woodford I think the operator will try to keep it on line and get a larger operator to come in and drill some horizontal wells to drain the unit. From what you relate you seem to be in the dry gas area. The gas price will really slow down drilling in that part of the play.
That 1/8 royalty will stay with your lease until the well stops producing. I would think the operator will do eveything he can, as long as it does not cost too much, the keep the well going hoping for a larger operator to see that this unit has some gas left to give up. He may even be contacting some of them and making an offer.
You will have the 1/8 in case he makes something happen as far as a horizontal well is concerned. You still have the option to go through a lawyer and try to have the well capped.
Daniel, Did you get 12% on the entire amount or just the portion over 6 months late?
The entire amount in both cases.
Thanks William and Daniel, I’m sure you guys know how I feel the waiting is nerve wracking, so close yet so far…!
Could any of you veteran royalty owners explain to this newby again the procedure of first payment. If 6 month has passed do you receive payment for 4 months and then a monthly payment there after? We will have been in production 6 months next week and Continental says D.O.s being sent out Monday. Thanks, Mike
michael—It has been my experience that the first check arrives one or two months after the DO. you are right, the first check usually is for the total months of production minus two.
I just went thru this, on two wells, with XTO. I had to contact them to get D.O.s, but was getting paid anyway. However, I did not get paid within the 6 month time frame, so I asked for the penalty fee.
One of the wells was about 10 months late, I got 12% interest from the first month. The second well was 19 months late, and again it is 12% from the start. I used the date from the Completion report to determine if we both agreed.
It could take a couple of month to get the check, it will not be Direct Deposited, and you need to keep on them.