Help! Received notice of hearing for amending unit boundary setbacks.

Oil and Gas Leasing Help
#1

Hi All,

Information and help would be greatly appreciated.

Own 1/8th interest in 640 acres at TWP 35N, RGE 70 West section 24: w 1/2 and section 34: w 1/2 Converse County WY.

Just received a notice from an attorney on Colorado saying "Anadarko E&P onshore LLC amending the unit boundary setbacks for the turner formation in an approx 1,280 acre drilling and spacing unit est. for the turner formation underlying lands in sections 12 and 13, township 35 N range 70 w. 6th pm Converse County". Hearing May 8th so time to object is soon.

Anadarko is getting ready to drill however, the drilling company on the one well in our area is Shell. What is up with that?

Question: Should I object and why?

Another Question: There hasn't been any action in this area for years and only one well producing and within the last 6 months I received two offers to buy my rights within a year. What's going on in that area? By the maps I found through this site, it looks like coal is just north of this area.

Dad said to never sell, but is that good advice?

Again, thanks again for info and feedback!

Jeanne

#2

Jeanne,

Anadarko is a major player in the new oil business. It has become very aggressive recently in Converse County. It is positive for mineral owners to have such a major company in the county. I see no need to object to the setbacks change, Anadarko is being efficient in where it locates drilling pads most likely.

Horizontal drilling and Fracking in the prolific Niobrara formation has completely changed the exploration and production business in Converse County and many other areas as well. Your Dad had good instincts and I recommend that you not succumb to any offers to sell until you thoroughly understand what the value of your minerals are to the industry and then what is most important to your future. The many "offers" I have seen and evaluated are usually ripoffs to the mineral owner

You should dig out the latest lease you can find and understand what it says. Especially about the term and termination provisions. Expect to receive lease extention or top lease offers. Get some expert help before thinking about extensions and never never never sign top lease. That would violate your father's good advise.

Gary L Hutchinson

#3

Hello Jeanne:

We are just one township over from you & I watch the hearings, permits & drilling in our area occasionally. The request for reduced setbacks (especially for the Turner formation) is pretty common recently for that area This would allow the driller to possibly drill more wells in a unit. Sometimes the top hole will even be slightly within an adjacent unit, but the extraction zone & bottom hole will be within the unit itself. They must have notified you because your partial section 24 is adjacent to sec. 13. I'm not sure what you mean about Shell drilling in "our area". If you haven't already looked at it, here is the link to the May hearings to see what Anadarko has planned for your general area. http://wogcc.state.wy.us/HearingFrame.cfm?Skip=%27Y%27&oops=ID56385. You can also go the permits page & look up all permits for Anadarko & they'll be organized by section/range. You might also check a few other operators to see what permits they have for your township. http://wogcc.state.wy.us/OperatorsApds.cfm You might also watch on the SPUDS page of the WOGCC website & then watch for results although many of the permits are now CONFIDENTIAL which means they can keep the details private for 6 months. I sure wouldn't sell now. Hope you'll get a good well in your unit/s soon.

AJ

#4

Was the previous Unit boundary 640? If so, your interest has been diluted by 1/2, meaning royalty checks would be less.

#5

Hi AJ,

The last royalty check we received was in 2016 and from Shell. Thanks for the links too! I'm going to be watching what is going on in this area more. Looks like there is a lot of coal just north of our area so that would be a nice payday.

Thanks for responding!

Jeanne

#6

Thanks for responding! I have no idea which company has the current lease because I haven't been paying attention because I'm the remainderman and my step mom is the life tenant. I'm paying attention now! The last check she received was from Shell in 2016. And she's not organized so I'm sure she wouldn't be able to get her hands on any lease. Where would I go to find that information?

The info about Anadarko and the set backs was very helpful!

Thanks again!

Jeanne

#7

LOL! Royalty checks are really less for me because I'm the remainderman and my step mom is the life tenant. She's a sweetheart but disorganized so I'm trying to start learning about what is going on. The warranty deed does say 640 acres.

Thanks for responding!

Jeanne

#8

You don't have to lease if you don't want to.

You don't have to sell if you don't want to ... I agree with your Father's good advice.

Coal? Do you have any idea what mining coal does to the land? Stop thinking only of $$ signs. Get realistic! And get "expert" help with understanding what O&G leasing is about.

Good luck,

Pat