Here are all of my vitals before I proceed with questions;
I live in Colorado. I live in Weld County. Name of operator is EnCana. Property name is BOYD 3-19. My location is 003N 068W 019 SW. Total acres in pool is unknown to me. I only own 1.33 acres in the pool.
First question(s):
I have tried to estimate my royalty by using a Natural Gas Royalty Calculator, online. I recently filled out 3 Division Orders to receive my first royalty check. I thought I'd be able to find out how many acres are in the pool, however, I can't find out that information. Does anyone know how I could find out how many acres are in the pool? Does anyone know how many acres in this pool?
Second question: There are 3 producing wells from that property, of which I am in the pool. It is operated by EnCana. Within a half mile, north of my home, there are 2 other drilling sites. They both have EnCana signs out front. Is it likely that I could get royalties from those as well?
Third question: When I searched online for natural gas wellhead prices, in Colorado, I could only find information for 2010. It shows $3.96/thousand cubic feet. The online calculator only asks for dollars/ million cubic feet. How do I accurately find this out? Or, should I simply wait for my first royalty check to find the answers?
Fourth question: I have a deal made with a company to sell my mineral rights. From research, the deal is very good. However, I'm being held up from B of A. They won't release the minerals. So, I'm considering refinancing to a different mortgage company, to ultimately sell the mineral rights. I would imagine the long-term benefit of receiving royalties would be greater than selling my minerals. At this point in my life I would be okay with that... unless, I discovered a ballpark idea of what the royalties would be like. If the royalties are going to match the outright sale price in less than 5 years, I'd keep the mineral rights. Has anyone here sold their mineral rights before? Was it a good idea for you, or not?
Fourth Question - B of A shouldn't be able to prevent you from selling your minerals, although they appear to be making it difficult for you to do so. You've already leased your minerals, did B of A sign a subordination agreement when you leased?
Jamin, before going any further with answering your questions, I've attached a PDF here that contains the production history and the well completion history for the Boyd 3-19, that I just now downloaded from the Colorado Oil & Gas Conservation Commission website. The website shows that the 3-19 is the only well named "Boyd" currently in Section 19. There is only one other well in Section 19 that has not been plugged & abandoned, and that's the Bohrer Trust 21-19 in the NWNW 19 3N 68W. Both wells only produced a trickle in October 2013, and no other production. It appears the Boyd 3-19 will be classified as a dry hole according to the data on the attached.
Your share of the less-than 40 MCF of gas sold from the Boyd 3-19 probably is less than $100, so you won't receive any payment until your account reaches $100 or the month of annual release of all accounts less than $100 by EnCana, whenever the next one is scheduled.
Great question/point. They didn't sign a subordination agreement. I didn't see anything from them until they said, via email, they won't release.
Kitchen said:
Fourth Question - B of A shouldn't be able to prevent you from selling your minerals, although they appear to be making it difficult for you to do so. You've already leased your minerals, did B of A sign a subordination agreement when you leased?
Thanks for the info. It does lead to a few more questions though. How do we physically see that a well is abandoned? I only live about 450' away from it. Sure, I don't see people or vehicles there, but I was thinking it was producing since they sent me paperwork to be signed, to receive a royalty check. They said there was 3 wells producing...
Marsha Breazeale said:
Jamin, before going any further with answering your questions, I've attached a PDF here that contains the production history and the well completion history for the Boyd 3-19, that I just now downloaded from the Colorado Oil & Gas Conservation Commission website. The website shows that the 3-19 is the only well named "Boyd" currently in Section 19. There is only one other well in Section 19 that has not been plugged & abandoned, and that's the Bohrer Trust 21-19 in the NWNW 19 3N 68W. Both wells only produced a trickle in October 2013, and no other production. It appears the Boyd 3-19 will be classified as a dry hole according to the data on the attached.
Your share of the less-than 40 MCF of gas sold from the Boyd 3-19 probably is less than $100, so you won't receive any payment until your account reaches $100 or the month of annual release of all accounts less than $100 by EnCana, whenever the next one is scheduled.
I haven't seen this lately, however, I did see the off gas vents (I think that is what they are called) glowing orange at night. Anyone know what that means?
It's not possible to "see" that a well is abandoned, but the Boyd 3-19 hasn't been abandoned yet--in fact, according to what I found on the COGCC website, the well has not been technically completed yet. They are not finished with working on it to try and get it producing. Based on what's in the record, it's not capable of producing in economic quantities on its own. It will need reworking to try and establish economic production, if the formation and wellbore conditions will even allow that. The question is, will EnCana put the extra hundreds of thousands of dollars into the well trying to get it to produce, or will they cut their losses and walk away (properly plug & abandon it)? As for the orange glow you are seeing, it sounds like they are flaring the gas. Perhaps the gas requires processing or compression before it can be sold into a pipeline and until they either plug it or rework it, they are flaring (burning) the gas at the wellhead? Check the royalty clause in your lease very carefully. If it says you are to be paid royalty on gas "produced" then they still owe you royalty on the gas they are burning, even though it wasn't sold.
Jamin Mayer said:
Thanks for the info. It does lead to a few more questions though. How do we physically see that a well is abandoned? I only live about 450' away from it. Sure, I don't see people or vehicles there, but I was thinking it was producing since they sent me paperwork to be signed, to receive a royalty check. They said there was 3 wells producing...
Marsha Breazeale said:
Jamin, before going any further with answering your questions, I've attached a PDF here that contains the production history and the well completion history for the Boyd 3-19, that I just now downloaded from the Colorado Oil & Gas Conservation Commission website. The website shows that the 3-19 is the only well named "Boyd" currently in Section 19. There is only one other well in Section 19 that has not been plugged & abandoned, and that's the Bohrer Trust 21-19 in the NWNW 19 3N 68W. Both wells only produced a trickle in October 2013, and no other production. It appears the Boyd 3-19 will be classified as a dry hole according to the data on the attached.
Your share of the less-than 40 MCF of gas sold from the Boyd 3-19 probably is less than $100, so you won't receive any payment until your account reaches $100 or the month of annual release of all accounts less than $100 by EnCana, whenever the next one is scheduled.