Diving into the mineral owners' side of the fence of drilling has reminded me that 'the more you learn the more you figure out you don't know'.
so - in my beginners steps of understanding... (intent on catching up)
Does the expiration date on a drilling permit apply to anything more than just drilling the hole? Does fracturing or completion as examples heed that date?
Larry:
The drilling permit expiration date generally indicates the time at which an opeator has to be actively drilling a well. These drilling permits, which are granted by the State Agency which oversees oil and gas, is normally inexpensive to acquire such as in North Dakota, where a permit costs around $100.00. If the operator is running behind on their drilling schedule, it is somewhat easy to obtain a renewal on the permit. In North Dakota , a daily report is issued regarding the daily acitivity and it is not rare to see the headings "Permit Cancelled" or "Permit Renewal". The only thing that on the mineral owner side to be concerned about is the lease expiration date.
Thanx Charles
So if I understand you correctly - as long as they begin drilling the hole before the permit expires they have as long as it takes to complete the entire process.
i'm seeing an interesting trend. When my questions get answered they tend to expose I should have known that but was not in the right mindset. Kinda like what happens to me when software seems magic when I don't understand it. Complicating it with too many mysteries.
I appreciate your response. This site seems to have plenty of knowledgeable and patient folks willing to help us newbies. It's very helpful and kind of ya'll.
Thank you
Larry
charles s mallory said:
Larry:
The drilling permit expiration date generally indicates the time at which an opeator has to be actively drilling a well. These drilling permits, which are granted by the State Agency which oversees oil and gas, is normally inexpensive to acquire such as in North Dakota, where a permit costs around $100.00. If the operator is running behind on their drilling schedule, it is somewhat easy to obtain a renewal on the permit. In North Dakota , a daily report is issued regarding the daily acitivity and it is not rare to see the headings "Permit Cancelled" or "Permit Renewal". The only thing that on the mineral owner side to be concerned about is the lease expiration date.
Not sure which state you are interested in but this is from the Texas RRC site FAQ about the life of permits which I did not realize but went searching for the answer after seeing this thread.
"You are allowed two years from the date of approval of first filing to spud the well. If you have not spud the well and are amending the filing with 30 days or less before the permit expire, the system will inform you that you only have 30 days to spud your well or it will expire and any amendments will not matter. ANY AMENDMENTS THAT ARE MADE TO FILING AFTER THE INITIAL APPROVAL DATE DOES NOT PROLONG THE LIFE OF THE PERMIT."
Lance:
Each State has their own rules regarding drilling permit applications but in most cases, once approved, the drilling permit is somewhat easy to renew. Some operators will seek multiple drilling permits in an area where they are developing and depending on several factors such as production figures on wells within the proximity of the permit, will have a direct impact on whether the permit is actually utilized. Keep in mind, just because an operator obtains a permit, until the spudding begins, it's all just paperwork formality.
Lance Brashear said:
Not sure which state you are interested in but this is from the Texas RRC site FAQ about the life of permits which I did not realize but went searching for the answer after seeing this thread.
"You are allowed two years from the date of approval of first filing to spud the well. If you have not spud the well and are amending the filing with 30 days or less before the permit expire, the system will inform you that you only have 30 days to spud your well or it will expire and any amendments will not matter. ANY AMENDMENTS THAT ARE MADE TO FILING AFTER THE INITIAL APPROVAL DATE DOES NOT PROLONG THE LIFE OF THE PERMIT."
Thanx Lance - I live in Texas, but the Eagle Ford Shale formation just missed me to the south :~}. The property with hope now is in Oklahoma. But your effort isn't wasted on me. It gives me reason and a lead to search for like rules there.
Charles - your point of a permit is just paperwork is well taken.
... and leads me to ask an equally silly question just to get it asked. I guess the 'intenet to drill' announcements in oil+gas reports are merely announcements that a permit was issued?
Lance Brashear said:
Not sure which state you are interested in but this is from the Texas RRC site FAQ about the life of permits which I did not realize but went searching for the answer after seeing this thread.
"You are allowed two years from the date of approval of first filing to spud the well. If you have not spud the well and are amending the filing with 30 days or less before the permit expire, the system will inform you that you only have 30 days to spud your well or it will expire and any amendments will not matter. ANY AMENDMENTS THAT ARE MADE TO FILING AFTER THE INITIAL APPROVAL DATE DOES NOT PROLONG THE LIFE OF THE PERMIT."
Larry:
Don't know what website you are seeing this "Intent to Drill" but most likely this does mean that a drilling permit was obtained. There are so many variable factors that must be dealt with prior to the actual drilling of a well such as all involved in the % of a well, rig availability, etc. This is why some permits lapse and of course if nearby wells are "poor" producers, plans are changed to even drill the well.
Larry Puckette said:
Thanx Lance - I live in Texas, but the Eagle Ford Shale formation just missed me to the south :~}. The property with hope now is in Oklahoma. But your effort isn't wasted on me. It gives me reason and a lead to search for like rules there.
Charles - your point of a permit is just paperwork is well taken.
... and leads me to ask an equally silly question just to get it asked. I guess the 'intenet to drill' announcements in oil+gas reports are merely announcements that a permit was issued?
Lance Brashear said:Not sure which state you are interested in but this is from the Texas RRC site FAQ about the life of permits which I did not realize but went searching for the answer after seeing this thread.
"You are allowed two years from the date of approval of first filing to spud the well. If you have not spud the well and are amending the filing with 30 days or less before the permit expire, the system will inform you that you only have 30 days to spud your well or it will expire and any amendments will not matter. ANY AMENDMENTS THAT ARE MADE TO FILING AFTER THE INITIAL APPROVAL DATE DOES NOT PROLONG THE LIFE OF THE PERMIT."
charles
the intent to drill announcements I'm referring to are in the newspapers within 'oil and gas reports', although i'm looking them up online. Now that i've gotten closer to the right image of the processes, I'd be surprised if they aren't merely announcing the drilling permit was issued.
I still have questions about the drilling permit though. In a previous discussion somebody pointed out there are several steps in the process of preparing to drill within the state's controlling agency. Then it was said that the next document after the drilling permit I should find posted by that agency is the spud report - meaning they're preparing the location for drilling. So, my question now is; Does the drilling permit having been issued mean that there are no other process requirements to be met with the state agency before drilling? (pardon the overly-basic questions, but i have a history of assumptions leading me wrong)
Larry:
It depends on the State you are talking about but I can only advise you on ND and MT. When a permit is issured by these State agencies, all required documentation has been provided via a scheduled hearing and proof has been provided by the operator that they have a majority acreage holding in an area thus can drill. The really next stage will be the correspondence between the oil company and the State agency as they proceed to drill. Most States have field inspectors which will sometimes witness on-site the various tests and stages in the drilling process such as surface casing jobs, etc. Hope this sheds some light on your question.
Larry Puckette said:
charles
the intent to drill announcements I'm referring to are in the newspapers within 'oil and gas reports', although i'm looking them up online. Now that i've gotten closer to the right image of the processes, I'd be surprised if they aren't merely announcing the drilling permit was issued.
I still have questions about the drilling permit though. In a previous discussion somebody pointed out there are several steps in the process of preparing to drill within the state's controlling agency. Then it was said that the next document after the drilling permit I should find posted by that agency is the spud report - meaning they're preparing the location for drilling. So, my question now is; Does the drilling permit having been issued mean that there are no other process requirements to be met with the state agency before drilling? (pardon the overly-basic questions, but i have a history of assumptions leading me wrong)