We received an RRC notification that Oxy plans to drill 2 new horizontal wells on our land (yay, as there were only two older vertical wells there, producing modestly) BUT that they want to pool the production of the 2 new horizontal wells with 17 existing older wells on other leases. Apparently yearly well tests (?) will determine how to divide up royalties. The downside is, that from our limited experience with other horizontal wells, there is a “bloom” from new wells which rapidly decays as the well ages. It seems likely to us, that the “bloom” from the 2 new wells will be diluted away by the presence of the 17 older wells. I can see commingling the new wells with the 17 older ones after, say, 1 or 2 years of production but not at first. If “well tests” are used they ought to be monthly at least, not once a year. The lease we have with Oxy is an old one from the days when there were only conventional vertical wells, so this subject is not covered. The RRC notification indicates it’s informational only, apparently we have no say in this. Has anyone else dealt with a similar situation?
I received the same notification. Not sure that’s good for mineral owners are bad for mineral owners.
Do you mean pooling into one RRC lease number? Or for the production from all the wells to be commingled at a common collection facility, at which point gas and oil and water will be transported off to market? It is more efficient and economic for an oil company to use a collection facility as a single point for the pipelines, rather than separate tank batteries for each well. The production volumes from each well should be measured and tested monthly, not annually. You should ask for an explanation of how the volumes and gas composition will be tested from your well(s). Get this in writing by email, not just in a verbal conversation where all you have is your notes.
Several different leases, not one lease number. And they say they will do well tests annually. Seems to me it should be monthly. Thanks for the reply.