Karnes County

Good morning in July 2017 Marathon Oil applied for a permit for Karnes City NE 2H Unit and NE 502H Unit. I have asked Marathon several times if these had been drilled and producing and the answer was they had not received division orders yet.

Could someone answer this for me?

Thanks, Karen Cash

Both of these wells reached TD in early December about a week apart. Used same rig to drill the TD section of both wells (typical oilfield operation right now). 2H is a single well pad while the 502H appears to be part of a multi well (up to 5) pad.

No official completion info on file yet with the Tx RRC. Plus no production info reported even in the "Pending" category.

My advice is just sit and wait. This is the tough time for any well (i.e. waiting for the results of the drilling / frac / testing and start getting checks). But once DO's are sent out and signed and checks start to be cut, they will come like clockwork.

MRO has permitted over 135 in Karnes Co for horizontal drilling in the past year - this is a HUGE number and work associated with each is extreme. It also appears that both of these wells (plus all the others in the NE Karnes City area) are town lot plays (drilled under the town). This will mean that there will probably be well over a thousand separate mineral owners in each 375 acre drilling / production unit. This significantly complicates the DO process - MRO will want to get this right the first time and not have to come back and change things later (which could result in people that initially got paid then not getting paid as corrections are made up).

I would expect that you will have DO's and first check within the next 3 months. But the good part about this is that the first check will include several months of production instead of only a single month - so a big check to start the royalty cash flow.

Suggest you keep an eye on the Tx RRC site to see when completion forms for these two wells are filed.

Thank you very much for your help.