Unless something has drastically changed, KEW has always been a bottom feeder flipper. They generally fit very well in the "round file"
Sometimes as a mineral owner, you make your money on your minerals just by leasing them over and over and over...again...
We seem to have an area, mostly in Lavaca county, and some of the southern part of Fayette county, that has to date not seen many, profitable /successful wells. It is almost a circle....
Draw a line----Start on the west with the NFR/Sabine Olsovsky unit, go down a little to the Cypress unit across from the feed store FM 532, then go down to US 90 just to the east of the Wellhausen units..then go east heading to Hallettsville, but before you get there go north to the Janak unit by Mascot which is also close to the shirley Steffek by Mascot as well. Now go due east to the ZaZa wells across US 77 Grahman and Coniff. then shoot up north through Schulenburg to the Cheers unit by Sanchez, then go west to the Sante unit-Sanchez, and then go southwest to the Prost unit O by Sanchez. you can finish connecting the dots by then going back to Olsovsky where we started. Now..... in the circle is also the Bigham, and Wolters..but we all know how those went.
And all the above mentioned wells (not Wellhausen-just used for point reference) were not good wells....
So it seems there are companies who will lease this area...but for the most part do not want to operate there. We do have EOG tracts in the northeast part of the circle though.
You see that KEW, Ross and Delago are the ones in this circle now and all trying to flip.
Also we have some activity from Tri-C, HBR, Tight Rock and Modern within this circle as well. Could these be the ones to finally make a good well here ?
I am still hoping that someone, anyone actually does drill in this circle and comes out successful !!
Also SantaRosa out of Corpus was going to actually drill...but they have 2 other active projects that went way over budget. They are still looking for even more investors.
Hopefully I have the locations correct.
Draw a line----Start on the west
NFR/Sabine Olsovsky unit ( Several miles Northeast of Moulton)
Cypress unit across from the feed store FM 532 (Komensky)
Down to US 90 just to the east of the Wellhausen units (East of Shiner)
Then go east heading to Hallettsville
Before you get there go north to the Janak unit by Mascot (Southeast of Breslau)
Shirley Steffek by Mascot as well (Between Breslau and Moravia)
Now go due east to the ZaZa wells across US 77 Grahman and Coniff. (Applet's Hill and somewhat east of that)
Fayette County and not as familiar with.
then shoot up north through Schulenburg to the Cheers unit by Sanchez, then go west to the Sante unit-Sanchez, and then go southwest to the Prost unit O by Sanchez. you can finish connecting the dots by then going back to Olsovsky where we started. Now..... in the circle is also the Bigham, and Wolters..but we all know how those went.
The $64,000 Question for Bigham and Wolters at least is WHY they were unsuccessful. We dip$hits will never know the full story, but it's (1) poor geology (2) poor drilling/completion either by the 'company man' or the contractors (3) just plain old bad luck like the problem with breaking off something in the well at Wolters, and (4) at least in the case of Cypress, not having the expertise to pull it off in the first place.
On the plus side, they thought enough of Bigham1H to permit not one but two additional wells in the same area. And I don't know who owns the pipeline (maybe I should get out and look at one of the markers) or how a pipeline company can be convinced to spend the money, but someone also thought enough to build a pipeline over to Bigham. Add to that the fact that several pads were built (and never used) in the area, and all of that together means that at one time there were some pretty high expectations within that circle.
I would hate to see KEW or HBR and to a lesser extent Ross try to drill a well in an attempt to prove up their acreage because it seems like the area really requires that you know what you're doing.
Totally agree, here. I think the hope is that it was due to a poor operator. However, it could also be geology since those were EF wells, not Chalk. I was once told that the plan was for Santa Rosa (now KEW and SR) to drill a Chalk well off the Bigham pad since infrastructure was all there, you just had your drill and complete costs.
Ideally, you have a small guy drill a few solid wells, then let EOG/GeoSouthern/Blackbrush come in and drill the rest of it up, with their expertise.
I was told by HBR the Bigham is still producing about 30 barrels a day. The problem was with completion.
Out of curiousity I figured out how much I'd be getting per day if my place was part of the Bigham Unit. $22.70 before taxes. $158.96 per week. Not bad walking around money. 30 bbls doesn't sound nearly as pathetic to me now.
Dont worry those oil companies know what they are leasing. They have tested the area many times. (Lavaca Fayette)
Eventually, I think if you have land in the (oil window) you will be held under production. The output might be higher and lower depending on the knowledge of the driller. For example Penn Virginia knows exactly what they got drilled / lease territory and as they drill more wells in the area the more efficient they will get. EOG is even better at getting the most production out of a unit. So just bc one well produced low that does not mean the area is no good its just a learning curve. IF the area was terrible they wouldn't be leasing. Also, oil co. lease so they can get financial backing for future wells. They put that down as future revenue win win for the land owner and the oil co. it will just take time. You can see how they working their way up from the south which is the best territory to the the north eagle ford area.
Maybe DCP Intrastate Network, LLC for the west - east gathering line to Hwy 77.
Could be DCP Intrastate for the main line along Hwy 77 as well.
I wonder if a contract was signed for a certain amount of transmission capacity and that got the west - east gathering line built.
I can say for sure that the Bigham pipeline ties into the DCP Midstream north south pipeline.
Anyone heard any updates or rumors about the Geosouthern Freis well north of Weimar?
Finally. Some news. The W-1 RRC site just posted a filing for a salt water disposal well (SWD) owned by GeoSouthern Operating II, LLC. The name of the well is South Chalk SWD No. 1 and the location is on the east side of US 77 just north of FM 1383 (the Ammannsville FM road). I don't know for sure, but I think that this is a big deal. The plat was dated back last June, but they went ahead and pulled the trigger now.
Several thoughts on this... I would say initially, this is a good sign. This tells me that they plan to continue to develop the area and need disposal capacity for current and future wells. I would venture to guess that the wells are producing a good amount of water and they are having to haul a lot of it off, which is very pricey. In our case, I would say this is a good sign because drilling an SWD doesn't generate any revenue (obviously) and shows their commitment to continued expansion in the area. Especially with a total depth of 15,000', that's going to be an expensive SWD drill well.
I'm glad that you brought up the 15,000' depth. The depth depends on the strata, but regardless that depth is really deep for an SWD. I'm wondering if GeoSouthern plans on disposing that much water themselves or if they plan to charge other companies for that service. I don't even know if regulations allow that but it would be a good way to help defray the costs.
You would be able to find out if you saw the disposal permit. For those that don't know, there are two types of disposal permits, injection and SWD. Injection is disposal into a productive reservoir, an SWD is disposal into a non-productive reservoir (defined as no production from that reservoir within 2 miles). You have to have leasehold rights for an injection permit but do not have to have leasehold rights for an SWD, just an agreement with the surface owner and a notice sent to nearby operators.
That being said. If we eventually get to see if they submitted an injection or disposal permit, which I am assuming based on the name that it will be a disposal permit (form W-14 with the RRC), we can see if they checked off-lease water being disposed and also if they permitted it as a commercial disposal well, which would show they are going to generate revenue from other operators to put water away in the well.
Good Morning W. I. and William. The submitted W-1 definitely states this is to be a disposal well.
CLICK ON DOCUMENT TO ENLARGE
Clint Liles
Thanks, Clint. I am just going by experience... I have seen wells with misnomers of SWD in the name but actually are permitted as injection wells. So the absolute concrete way of knowing is to see if they submitted a W-14 or a H-1. But in this case, I think it is safe to say it is a W-14 permit for disposal.
Since no real wells are being drilled, I've been thinking about the new South Chalk SWD and had a conversation with someone about it. From what I could gather, most SWD wells are drilled by a service company in that line of work or at least a subsidiary of the operator. The biggest cost of swd is transportation and not the actual disposal.
For additional information, check out the W-1 site http://webapps.rrc.state.tx.us/DP/initializePublicQueryAction.do and click the drop down arrow in Lease Name so that it says 'contains'. Then enter SWD and click on your favorite county. There are some around Flatonia and a new one at Plum but none east of a line from LaGrange to Flatonia to Moulton unless you go SE of Hallettsville.
So I imagine some GeoSouthern bean counters did the maths and recommended that they just drill their own and cut down on the transportation costs. Conveniently located on US77 and probably with good geology way down at 15000 feet (deeper than almost any other SWD in any county).
Irregardless (one of my favorite misused words) the willingness to spend that kind of money on infrastructure can only mean good things.
There are 2 Salt Water Disposal units (SWD) on US 95. One is in between Flatonia and moulton on the county line of Lavaca/Fayette, and the other is a couple miles south of Moulton on 95 as well. the one between Flatonia and Moulton is busy. I always see these trucks/tankers coming south on 609, turning right on US 90 then the left on US 95....
Interesting story on the 34 acres this SWD sits on. The SWD owner purchased this raw land about 3 years ago, and did not get any minerals. The SWD owner does not have to get minerals to put a disposal unit well. The mineral owners leased to PEnn Virginia. Penn made 2 units that ran directly through this 34 acres...the chickenhawk and berger cattle co. these units suffered great losses, on the horizontal drills closest to the SWD well, during the frac process...and still have a lot of salt water coming through....they drilled 4 wells in each unit back to back then frac'd all at the same time.....only 2 of the 8 were "ok" the others horrible.....wonder why ?? Penn has never mentioned this as the problem but blame hurricane harvey...talk on the street that I am hearing is that the SWD could have been the issue.
Also forgot to mention that Penn did put 1 well in each of those units before the SWD was operational and they were good wells.
Reading what you wrote, I went back an looked at the ~47 ac tract that the SWD is planned for, and that was sold to GeoSouthern back around May of last year. Standard operating procedure, I guess.
One additional thing caught my eye, and that's the upper right portion of the SWD plat which shows that it's part of the 'Swiss Alp Quadrangle'. I believe that they also have an Ammannsville Quadrangle. <time passes....> Just did some more research and at a minimum the Eichler well is part of the Ammannsville Quadrangle.
Wish I knew more about these Quadrangles, but they did show on the plats that the Swiss Alp Quad is 3.0 miles w. of Ammannsville, and the Ammannsville Quad is 3.3 miles east. How big are they? Or is it an area or just a line? Ready for a Schulenburg Quadrangle.
Inquiring minds want to know but since they're privately held I'm sure they scoff at our inquiring minds.