My in-laws have property in Dimmit County and have leased the property already. Actually the lease apparently has been sold to one of the large companies drilling in the county? It is a pooled plot of land. We have been notified and signed an agreement to have the land surveyed, my question(s) is about how long is it taking for them to actually survey the land and assuming the results are good, how long will it take approximately to begin drilling?
There is good activity in Dimmit County right now in the Eagle Ford Shale Play. Chesapeake and Anadarko have the most recent permits. You can access these drilling permits from the TRRC (Texas Railroad Commission) web site. Go to “Online Research Query” click and select “W1-Drilling Permits” and click on “launch application.” When the prompt displays select Dimmit County. You will need to put in the approved permit dates say from 2008 to current date to get the most recent activity. The shale plays are somewhat uniform and consistent but there are “sweet spots” that seismic can detect. There is no way to gage how long it will take to do the seismic but once started it goes fairly quickly. Then watch the drilling permits to determine if the well is located on your mineral property. Drilling permits are valid for two years, I believe.
Thanks for your reply and I have some knowledge regarding the TRC site - have been visiting there frequently lately- LOL Most of the drilling that is close by (within 5 mile radius) is on the Brisco Land. I also check out Mavrick County also seems to be alot of drilling going on there also. Thanks for the information!
Apparently it is getting real hot in Dimmitt County - in-laws got a call someone wanting to buy land and mineral rights today! Still waiting on the land to be surveyed at this time. Things seem to move real slow from this end even thought the word is just the opposite!
It is very normal for a lease to be assigned to a company after initially being leased. It was probably actually leased for the “big company” from the start. That is how you hide who is leasing, by hiring an in between company to do the paperwork.
Thanks I try to do the same but mostly for family interest trying to keep informed. At this point we are waiting for the survey - seems to me with all the activity going on they would have some data already. I think we are right in the middle where all the activity to this point is hitting all around us, in my opinion just a matter of time. Heard part of the delay in some cases is the hunting season - - we love to hunt but would prefer production! LOL
The RRC seems to be getting ready to consolidate the eagleford into one big field covering areas of three RRC districts just as with the Newark (Barnet Shale). See this blog: http://www.oilandgaslawyerblog.com/ Yes, a very hot area, along with the Haynesville in east Texas
So in reality what does this mean for those land owners in the Eagle Ford Shale (Dimmit Co.) that have been leased recently but with no production or activity yet that we know of. Based on the blog it does not sound like a good thing for the land and mineral owner of pooled land initially. Don’t know. Sounds like they may drill one well in a large pooled area just so they don’t have to renew a lease in a pooled area?
In most cases, mineral owners agree to lease their acreage for a specified amount of upfront “bonus” payment, for a fixed period of time (primary term) with an agreed percentage of the revenue from all wells drilled. During the primary term MOST leases require the drilling of wells to “hold” a portion of the lease without having to pay additional lease payments for subsequent wells within the held area. Each well drilled holds a specified amount of acreage (usually 640-710 acres per well initially but, is negotiable). If the oil company does not drill all the wells that are needed to hold the entire lease by the end of the primary term, the remaining acreage not held, reverts back to the mineral owner. The mineral owner is then able to either lease the remaining “unheld” acres to the same oil company or anyone they chose @ whatever price they can negotiate (sometimes higher than the original lease amount, sometimes less…depends on the drilling results @ that time). Once the primary term has expired, the mineral owner could also decide to not lease the remaining acreage to anyone.
The proposed consolidation of the eagleford and the field rules are trying to do just that. Field rules are not usually written to benefit the mineral owners. One reason Chesapeake has tried to get 1200 acre units approved in the Toyah, NW (Shale) out in Reeves County. So far the RRC has not allowed that, mainly because it is highly doubtful that a well can drain that large a unit. Same thing with the eagleford.
Stuart E. Isdale said:
So in reality what does this mean for those land owners in the Eagle Ford Shale (Dimmit Co.) that have been leased recently but with no production or activity yet that we know of. Based on the blog it does not sound like a good thing for the land and mineral owner of pooled land initially. Don’t know. Sounds like they may drill one well in a large pooled area just so they don’t have to renew a lease in a pooled area?
Last I heard the RRC was setting up 2 fields for the Eagle Ford…an oil field (Eagleville) & a gas field (Hawkville) but, I may be behind on that “hearing”.
This is all greek to me I am not sure what difference it makes if the RRC sets up designated fields. So if Eagle Ford is oil, what happens if they hit gas which I heard there were big pockets of gas found in Dimmit County. Also all of my buddies that have production on their property in the area have told me that it is not if they will drill but when - as a relative of a land owner it sure keeps you on pins and needles. I told my mother in law who owns the land in Dimmit County about 7 miles north of Catarina to sit tight but it could be this year and it could be in 10 years before production within her pool. I don’t know. Problem is she is not getting any younger and it sure would be nice it something happened soon for her. Thanks guys for all of your input and information. It is truely appreciated since this is new to us and I have been disignated the keeper of keeping up with what is going on out there!
Nick Privett said:
Last I heard the RRC was setting up 2 fields for the Eagle Ford…an oil field (Eagleville) & a gas field (Hawkville) but, I may be behind on that “hearing”.
The RRC separates wells classified as oil from those classified as gas by putting them in separate “fields”. This is done for the purpose of regulating the well production and well spacing (distance between wells). This can affect a landowner, especially if a well is not actually drilled on their land, but only “next door”. The drilling unit (designated productive acreage) may or may not include adjacent acreage depending of how many acres are required in the Field Rules. It also can dilute your royalty. If a well is drilled on your 40 acres and you have a 1/4 royalty paid on say $8000 of sales, then you get $2000 ($5.00 per acre). If your 40 acre property is pooled with adjoining land to create a unit of 800 acres, you only get $100.00 ($0.25 per acre).
People who would like to get money out of their royalty interests before wells are drilled can sell their royalties. There are many people out there who buy and sell royalties just like stocks and comodities.
I know you are providing information and not opinions but I am not sure why someone would want to sell royalities if they are sitting right in the middle of a hot spot unless they just want cash now or don’t want to mess with it. I have heard there are people who will try to purchase royalities even after production has started - now that might get real interesting particularly if the find is substantial!
All true…A 1% royalty is worth much more than a 1% working interest because the royalty doesn’t pay any costs. Royalties are sold before during & even after production occurs.
Yup, some people just want/need cash now.
Stuart E. Isdale said:
I know you are providing information and not opinions but I am not sure why someone would want to sell royalities if they are sitting right in the middle of a hot spot unless they just want cash now or don’t want to mess with it. I have heard there are people who will try to purchase royalities even after production has started - now that might get real interesting particularly if the find is substantial!
I don’t know for sure but know the landman that worked with my mother-in-law and with his explaination of how hard some of the land owners that were needed or wanted for the pool to work with I suspect most in Dimmit County are holding on to their mineral and property rights especially with all the activity in the area.
John Everett Fine said:
Yup, some people just want/need cash now.
Stuart E. Isdale said:I know you are providing information and not opinions but I am not sure why someone would want to sell royalities if they are sitting right in the middle of a hot spot unless they just want cash now or don’t want to mess with it. I have heard there are people who will try to purchase royalities even after production has started - now that might get real interesting particularly if the find is substantial!
Anyone going to the Travis Building (TRR) next week on the 25 for the hearing? Just curous - would like to know what the verdict/result is. Do they make a judgement at that meeting or is like most politics where it will take a year or so to take effect if allowed?
The time between the date of a hearing and an order being issued can vary quite a lot. Lawyers have much to do with this. The final step will be when the recommendation of the examiner goes to the 3 Railroad Commissioners at monthly conference. Usually, the examiner’s recommendation is approved. June Conference is tomorrow, the 22nd. Unlikey the Eagleford hearing will go to conference before August. I may sit in on some of this hearing. Sounds interesting.