Help with with block Blk 51-8 trackt 7, AB 5578 Reeves, Texas

Hi guy’s My name is Richard. Just wondering if anything worthwhile going on in Blk 51-8 trackt 7, AB 5578 ,They did do a survey across that area a couple of months ago and have had a coupe of offers to buy from Midland companies, but mainly low ball. A notice of application for Stationary fluid recycling facility permit was also received along with a USB stick about the permit application Any input appreciated Thanks.

Below is RRC’s current map of that area with Abstract 5578 outlined in red.

Only recent activity is that salt water disposal well NGL Water Solutions got a permit for at the end of last year that’s marked by the small blue circle near the southwest corner of the section.

The green dots are the three wells Clayton Williams drilled in 2011-2012 that are still producing a little. Noble Energy took over all of Clayton Williams acreage in the Delaware Basin in 2017 and had planned to drill a bunch of new wells but like a lot of other companies has cut back on their plans this year.

Thanks Dusty1 Could you please tell me what the Salt water well is, I have no idea. And if there is any potential for that area, if any. Thanks

The big horizontal wells drilled in Reeves County produce a lot of water. Some is recovery of water that was injected when a well was fracked but there is also water naturally in the formation that gets produced along with the oil and gas. Salt water disposal wells that are drilled into non-producing formations provide a place where the operators can legally get rid of the water. There are lots of them scattered all over the county where water is delivered by truck or pipeline, some operated by the producing companies and others drilled by service companies that charge a fee per barrel to take the water.

I’ve got no idea about the potential of that area. It looks like Clayton Williams drilled two vertical and one horizontal well in that section 7 or 8 years ago and although all three are still producing the results look pretty marginal. But the technology has improved a lot since those wells were drilled so maybe new ones will turn out better.

Thanks Dusty1 Have better understanding now

Richard, It’s just a matter of time for you. The quality of the acreage is good. The Clayton Williams wells were early and poorly done. If you look at the Oxy wells just North of you on the GIS, this tells you what you could expect for your acreage. Primarily Wolfcamp production delineated this far south. I wouldn’t sell your share since it’s valuable. Probably a 12 well property eventually and possibly 18 if Hoban produces well this far south. If you are lucky they will sell the property to Oxy to operate. If not, hopefully they have leaned something about well design in this area. The mineral buyers are giving you 10 cents or less on the dollar most likely. Not knowing what your interest is, if you had a 2% (look on your monthly distribution report to see what the % is) interest in the existing wells then a 12 future well field would be worth $2.9M lowballing oil at $40 and greatly reducing EUR for a reasonable sale. Adjust the amount based on your actual %. I would also assume that they would pool you so that they could drill 10,000 foot laterals.

Hi petosama , Thanks for the reply, don’t know too much about what is happening over there , but don’ t intend to sell right now if there is any chance of anything happening on the property, One can only hope and pray and pay the taxes ,