A family trust jointly owns some oil and gas wells in Leon County. The wells were drilled many years ago and are producing albeit small returns. The lease and royalty documents state the wells are not allowed to go below 6,000 feet. The Trust has received many offers to purchase the producing wells at a very low value and justify by stating “they are at the end of their life”. Given newer drilling technology I would think there is an opportunity to either drill the existing wells deeper or drill close and possibly increasing potential production. If this were done I would think new royalty agreements would be re negotiated. Is this a reasonable assumption? And is this the likely reason the Trust is receiving so many offers?
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I think you’re right in assuming those offers are motivated by increased drilling activity in your area. You said those offers are based on buying the producing wells but if you get into the details I expect you will find they are actually wanting to buy the full mineral interest the trust owns, not just the production from those wells.
As long as existing wells are producing they would hold any of your acreage that’s included in the units formed around those wells, or possibly all of the acreage covered by the lease if it didn’t include a Pugh or similar clauses requiring acreage outside units to be released at the end of the primary lease term. But you mentioned that your lease includes a depth clause excluding depths below 6,000 feet. If that is outside the current leases and not held in some other way those depths should be available for leasing and drilling now, and the current activity in Leon County is targeting depths well below 6000’.
If you’ll post a legal description, or simply a survey abstract number, where your acreage is located, or the name and operator of the wells you have an interest in, someone on here should be able to help you check out recent permitting and drilling activity the Railroad Commission’s map is show in your area.
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Is this area in the Old Alabama Ferry field? It is a trick most likely. A lot of the leases that were signed year’s ago had very little protection for the mineral owners. Good Luck,personally I would not sell.
No intention of selling. We own rights associated with producing wells. However those wells are shallow by current standards. The only family held records I can find state the wells cannot go below approximately 5800 feet. With newer drilling technology drill depths are 16-18,000 feet in the area. I assume if new wells are drilled in the area where our “shallow” wells are existing agreements would be re-negotiated? I am contacting the current companies that are associated with our “shallow” wells to request copies of the original agreements. The reason for my prior post was to ask for information from others who may have experienced the same situation. Lastly not sure where the “Alabama” region that you mentioned is located. Thanks
The “Alabama Ferry Field” in Leon County, Texas was southwest of Centerville, Texas This was basically an oil field that was found in the early 1970’s approximately. I can remember HUGE, HUGE amounts of gas being flared. Gas flares burning that were about 100 feet of more for a while. Some land and mineral owners signed a pooling agreement that covered thousands of acres of land. Those people that are still alive today regret doing that now.
Southeast of Centerville not southwest. Sorry about that.
If you have depth limit in the previous OGL for the property, then depths below that are unleased. You will want to check the County Recorders office for and recorded OGLs for this property. If you do not feel comfortable performing this type of search, then you can employ a landman to do the search. You can also go to TexasFile.com and search for the records online. You may also want to talk to the local abstract company as far as performing a title search related to OGLs. Good luck.
Any activity in the E H Whitton survey? This is about 3.5 miles N of Centerville on I45. I haven’t received anything to this point.
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