Receiving payments on 3N 4W Section 29 Vesta Marie well. Generating almost as much income from gas as from oil due to relatively high BTU values. Only producing about 2/3 of the flow tested rates on oil and gas. Seems like they may have it choked in order get better production in the long run. Has anyone else seen this from Continental?
On further review, no part of sec 7 is in the PH Unit but Merit does have the two active wells in the section.
Mr. Vandegriff, In the April 13 to 24th discussions here you will see that S.F. Zane signed a lease with J.P. Drilling for $1,600 and 1/4.
To Ron, Rick and others. This section interests me because I believe 80 acres on the eastern side are in the Purty Hart unit and Merit has two wells in the section on 80 acre spacing drilled by Anadarko in 2002 and 2003. One well appears to be outside the Unit although some of the acreage may be in the Unit and these were drilled 50 years after the unit was formed. Is Marathon working with Merit? Was there a depth clause on those two wells? The wells are in the Deese and Hart formations and producing ~ 42 gravity oil (as of comp report time).
M. Barnes, from the maps I’ve seen just East of the current “fairway” being drilled is the more oily play. I believe that sections such as seven are only on the edge because they are HBP and of course the drillers are trying to drill everything that they have leased in the virgin sections. Of course I am talking my book since I am sitting 3 miles from the eastern edge of all this activity.
I just posted on the Stephens County about value of SCOOP wells if you are interested.
Martha
Mr. Vandegriff my shares are also Sec 7, 3N, 4W and I signed for $1600 and 1/4, as Lyndon Foley mentioned. What does Mr. Barnes mean by “Also, section 7 is on the edge of the current trend, so you might not get quite as much” -We were told Marathon was going to drill - is section 7 the outskirts of all the action?
One more question - I have a letter from the Oklahoma Mineral Owner Registry asking me to verify if I still own rights and pay an annual records fee. The fee is only $35 but is this something legitimate?
Thanks for the info!
Thank you M Barnes - very good to hear. I appreciate it.
Sandra…I think “Mr. Barnes” is a Ms… I think she said her name is Martha. Smart Gal isn’t she?
Well, more research shows my lack of understanding of leases is not in my interests. I contacted Carolyn Emery of BlueStar Land Services for advice (I’ve worked with her on Grady County leases). She was able to look up my interests and found that I have already leased this property to Merit Energy because I did not have a depth clause in the previous lease which is producing. I’m appalled at my lack of knowledge (and poor record keeping) which I am attempting to correct. Thanks to all here on this site for helping with my education.
I did get to make a fast trip down through the diggins as I went to Duncan on a mission. There is a new rig sitting a top the hill on the right side of Highway 76 about two miles this side (north) of the Stephens/Garvin line. I’d say it’s on Section 22 3n, 4w. Then just across the section line road south of there they are building a big location on Sec. 27 3n,4w Garvin. This is the land belonging to Jerry Sublet I believe. So if there becomes a well named the Jerry or the Sublet I’ll know where that is probably! I bet they paid a premium for that one as it’s that fertile river bottom land.
Could still see the top of the rig further down that road to the west over the trees. Grergery, if your well is on 20 then it would be a couple of miles west of that new rig that was up on that hill.
Moving on down the two rigs are still sitting on the final two Branch wells. Lots of pipe in the on the east.
New sign up to keep people from going into the Poteet. Says “DEAD END- GATE LOCKED”
Ms. Barnes, can you expound on the oilier being not quite as valuable position? We know the relative prices for nat gas of high btu content and oil. Is it that you think the current fairway wells will have enough of a higher total BOE per well to more than offset the higher oil ratio in a well in an oilier area?
Two more areas that I would appreciate your opinion. Do you think the Woodford Shale is the source rock for the Deese, Hart and Springer. I believe the Hart and Springer are called sands.
Depth of formation and oil vs gas. It is my understanding that the greater depth the more pressure the more gas and that there is an absolute cutoff. I know absolute sticks out like a mole to be whacked but is it 14000’ or 17000’ or ?. Thanks.
Answers to Lyndon’s questions Garvin Co. #1 According to CLR (Continental Resources) on slide 15 (their slide show from 10-7-12) a “type” or generic oil well will return 626MBOE (626,000 bbls of oil equivalent) with 75% liquids. A condensate “type” well will give 1190 MBOE with 61% liquids. Condensate gets the same price as oil out here. So with $90 oil/cond and $5.00 gas since this area gets better BTU value as it is richer in energy value… For simplicity’s sake, keep the price constant over the life of the well. (not true, but just for simplicity) Used prices similar to what we have now…
626 MBOE x .75 x $90=$42,255,000
626 MBOE x .25 x $5= $782,500
Oil zone well= $43,037,500 over life of well-proceeds divided between operator and royalty owners.
1190 MBOE x .61 x $90=$65,331,000
1190 MBOE x .39 x $5= $2,320,500
Condendate zone well= $67,651,500 over life of well.
Look at their slide 16 for the Rate of Return. See how much higher the red line (condensate fairway) is than the green line (Oil fairway) NGL is natural gas liquids-also known as condensate.
So, some oil wells will do better, some condensate wells will do worse, but that is what I based my answer on. See slide 13 for variety. Also, I just went to a conference in April in OKC about the Woodford and the operators there said they were concentrating on the condensate zone first. They will drill both. See slide 27. The pipelines are in the condensate area first (brown). But they have LOTS of acres in the oil fairway (green). They will get there.
#2 Look at their slide 25. It shows all the shallow conventional reservoirs above the Woodford. I do not know the particular info for the Deese, Hart and Springer but it seems reasonable that it is sourced by either the Woodford Shale or the Goddard or Caney Shale. Sources are usually below the zones they ultimately collect the hydrocarbons. Look at Slide 8-11 to see how it works. Slide 25 is why this area will be around for a while. Look at all the reservoirs that are still left. Hold onto your acreage if if makes economic sense for you to do so.
#3 in next comment
Sec 7 is at the edge of the current drilling trend but not necessarily the true edge. It gets oilier towards that way and not quite as valuable but still good. . Companies have a lot of acres that they need to drill and not enough rigs. Will just take time to get to everything. You should get a Force Pool notice if you haven’t already leased. It may be a few weeks. I suspect that the drilling trend will expand as time goes on. $1600 and 1/4 is pretty good. If you only have one tract, don’t bother with the registry. If you have multiple, then it is to help companies find you. Might be useful if you moved or the minerals passed down in a will. Companies have to make a good faith effort to find you. Probably not for everyone. I tried it for this year. Will let you know if it is worth it next year .
Sandy, you done good!
#3 This is a more difficult one to answer. In general terms, yes, the deeper you go, the more weight of rock and the hotter the temperatures, cooking the kerogen (basic building block of hydrocarbons). It goes through the solid to liquid to gas stages. Think bacon cooking in a skillet. The white fat is semi solid, gets hotter and turns into grease, gets really hot and the steam (gas) comes off. Cook it too far and it burns and the fire department shows up. Not good! No breakfast! Think about the SCOOP as the grease, right when it smells really good and not quite smoking.
The trend of the Woodford in the SCOOP is NW to SE. At the conference I went to they said that the gas, condensate and oil zones “generally” line up with structure. Look at Slide 27. So the gas zone has gas and no liquids and lies to the far SW side of the trend. With gas prices low, they don’t need to drill it now. The condensate zone is in the middle and the oil zone more to the NE.
I don’t know what the depths are. I have seen a map recently, but can’t find it right now. Looking for a public data source that I can share. I think your 17,000’ is closer in range, but not absolute. Definitely not the 14,000’. Most of the Woodford wells in the SCOOP area are between 10,000 and 16,000’ but I don’t know if those are true vertical depths. Faults can make a difference as well.
Does that give you a general sense without getting too techie?
Sandra Finney Zane, what is the contact information for JP Drilling? Thanks
George 214 577 1995
Sandy, I’ve never heard of anyone getting even close to $1600-1/4
Susie I am in 21-3n-4w next to you and they are finishing a well there now. Your section 22 has been forced pooled with ordered issued 1/28/12 and a permit to drill issued 3/29/13.
@ Linda - thank you for pointing that out! Good to know, and yes, Ms. Barnes has been very helpful.
@ Michael - my sisters and I all received several offers, and the $1600 with 1/4one was by far the best. We were surprised too - but at the time we had about 5 different offers and JP Drilling came up with this one. After being on here a few times I realized it was a better deal than most - I even pulled out my contract and double checked to make sure I had read it right, lol.
Sandra,
As a landman I have never contacted the mineral owners registry to look for someone, nor do I plan to. There is no substitute for having your name at the courthouse indexed against your minerals. Now that courthouse records are on computer if you have a lease on file with your current address all anyone has to do is enter your name in the computer and there you are.
Why did that make me hungry?