I've just received an offer to buy water which will be piped 6 or 7 miles to a drilling site. Can anyone help me with information on: 1) Going compensation rates? 2) Standard contracts and factors to consider in signing a contract? 3) Impact on watershed and others who are downstream?
Thanks, RK
It may take 50,000 barrels to drill and complete (frak) each well. Other's may know the current price in the Perry area but in TX water is getting scarce and being sold $0.30/$0.40 per barrel or more. The articles below claim Devon needs water. Also, if you don't own the minerals you might want to ask a higher price.
http://www.fool.com/investing/general/2014/04/11/water-scarcity-rearing-its-ugly-head.aspx
Friend of mine east of Perry with only a minor portion of a flood control lake said they only got .22/bbl. This was the latter half of last year.
Go for a dollar a barrel. That's what they are charging the mineral owners who elect in some of these wells.
I sold water near Loyal OK in Kingfisher County on a Newfield well for .25 a barrel last may. Newfield drills two mile laterals, so 122,000 barrels a well are used. I sold them 336,000 barrels. Now I pray for rain!
I once owned a ranch south of Perry wouldn't sell pond water in that cattle country for anything less than .40 per barrel. Texas ranchers can attest that a bad drought and Devon can drain dry your ponds. We had a bad drought here in TX that ended 2 years ago and we prayed for 4 years. One area lost over half it's trees, all the ponds completely dried up and the lakes shores look like dry cracked desert.
Martha