Does anyone know how far in advance an oil company schedules an exact drilling date? I currently have minerals in an area (which has been permitted) and the lease is set to expire in July of this year. The operator previously stated that if the drilling could not be conducted prior to the lease expiration, they would negotiate an extension. It is noted that the operator has a rig in the immediate area but they also have two to three other permited areas in this vicinity.
Hello again Charles,
In the near term, drilling dates are most influenced by third party rig availability. Where you are located, rig schedules can be delayed for well problems, drilling deviations, (a big one), breakdowns, etc. Read your lease about what constitutes "spudding a well" If it is the building of a pad or setting surface casing, operators can hold your lease for a significant amount of time before actually getting a drilling rig on site. If the expiration date is short and the lease terms vague or subject to broad interpretation, a good operator will want to work out a favorable compromise to both parties. A battle will cause them to reschedule the rigs to another permit and everybody looses. Up there, rig availability is a problem, a place to drill is not.
Gary Hutchinson
Mr Hutchinson:
Thanks for the information you provided. I spoke with Marathon Oil Company today and learned that this well is scheduled to be drilled in late June 2012. This location is in the Williams County ND area near the MT border and will most likely be on a 640 acre spacing unit due to the small size of the border sections. The permit is under the name "Ione Barstad USA" and I feel that my acreage will be in the spacing unit. My mineral location is T157N;R103W;Section 31. If I am reading the permit correctly, this well should cover both sections 30 & 31. I am waiting on a reply from Marathon. Thanks again for your response.
Gary L. Hutchinson said:
Hello again Charles,
In the near term, drilling dates are most influenced by third party rig availability. Where you are located, rig schedules can be delayed for well problems, drilling deviations, (a big one), breakdowns, etc. Read your lease about what constitutes "spudding a well" If it is the building of a pad or setting surface casing, operators can hold your lease for a significant amount of time before actually getting a drilling rig on site. If the expiration date is short and the lease terms vague or subject to broad interpretation, a good operator will want to work out a favorable compromise to both parties. A battle will cause them to reschedule the rigs to another permit and everybody looses. Up there, rig availability is a problem, a place to drill is not.
Gary Hutchinson