Marquez area drilling

[23196054]

Reference Leon County Texas.

I have mineral rights in Abstract 76, Red Ranch Gas 2 unit, bought last year from XTO by Hilcorp.

I purchased these mineral rights about 2 years ago. Frankly, I’m rather ignorant about mineral rights, the inside/outs of what seems to be a very complex subject. I’m on a steep learning curve.

My understanding, there’s huge gas deposits running from Franklin, through Leon County, and beyond, within 3 miles either side of US 79.

Wells are being dug to about 20,000 feet for extraction. Also, a 36- inch pipeline being laid in, as numerous smaller pipelines. Apparently, Comstock is the most active company for now.

I’ve have just started getting offers to buy. The existing permit allows drilling to 100 feet below the deepest, existing well. All indications are that I can obtain a permit to go to 20,000 feet. Potential prospects

Questions:

Any knowledge of Hilcorp intentions to drill? I can’t imagine they would purchase these from XTO and not drill.

How is a permit obtained to drill deeper? Is this Hilcorp’s responsibility, or must I initiate action?

Is it wiser to obtain a permit for deeper than 20,000 feet, with the idea it may be needed for this particular area, and/or future , deeper drilling?? Obviously, Hilcorp has the geologic surveys and assessments.

How are royalty payments determined? Are payments spread to all mineral rights owners within an abstract, or to holder of a specific ownership area within the abstract where an actual well exists?

Any areas to gather information, such as, “Mineral Rights for Dummies”?

Thanks.

[M_Barnes]

Suggest that you get very familiar with the Texas Railroad Commission website. You can find permits there. Permits are filed by operators. Mineral owners generally do not initiate action unless they have the financial backing to do so. Various operators are active in the area. The map below outlines Abstract 76. There are several permits just to the S and E of you by Comstock. There is a rig on the one in A-948

Royalties are determined by what type of spacing and allocation allowed. An equation that accounts for net acres, spacing acres, royalty and feet perforated. The spacing may extend outside the abstract. Operators attempt to lease with all mineral owners within the spacing of the well.

You might consider joining the National Association of Royalty Owners. They have a very active Texas Chapter. NARO has chapters across the country in active oil and gas areas. They have classes on mineral ownership, webinars, conventions, etc. www.naro-us.org

A very helpful book is called Money in the Ground by John Orban. Very good reference for those in the oil patch.

[23196054]

Thank you for the response. You provided very helpful information.

[kborak]

Hi there,

Just saw your response and I’m familiar with the Railroad site but wondering how you can tell there is a well on a site (like A-948)?

[M_Barnes]

Welcome to the forum.

On the GIS map, you can search by county See the gray box in the upper left. Then by survey. abstract, block or section (see the dropdown box under the magnifying glass). The permitted locations have an open circle.

[jblakelock]

Hi Martha - do you know much about the easement lease process? I have my initial offer for the Pinnacle Gas Treating line. I’ve read everything I can find on how to negotiate but I can’t find anything about where the rate should be, justification for why I should hire an attorney or who else is impacted by the line. Any insight would be appreciated.

[M_Barnes]

Anything to do with an easement should go through an attorney in my opinion. You are potentially tying up your acreage for decades and maybe generations, so you need legal eyes on the terms of the contract, whether you are losing your land to a “taking” or not, what the methodology of digging an replacing the dirt, the bonus and royalty timing etc. There are TX attorneys listed in the Directories tab above or you can contact a surface specialist by looking on the bar association.

[Akranch]

We have had dealings with Hilcorp in Eastern Leon County in the Alabama ferry field. They pretty much sold out a mess to individual that no one can no longer be found. We have a injection station that got hit by lightning in 2013 on our place that Hilcorp never reported to the Railroad commission. Huge tanks still there today with holes in them along with everything else. Hilcorp is jump a milk and run company from 15 years experience they had this field. Several other land owners in our area locked them out and wouldn’t let them in unless the RRC guy was with them. I sure wouldn’t lease to them no matter what they offer.

[Akranch]

al

N This is what Hilcorp left on our place after demanding them to cleaning it up. They didn’t notify the RRC when this happened. I ended up reporting this to them and they said as long it’s on their location I have no say in this. I have minerals on this property and run cattle on it. The place is very nice but this location.

[Mineral_Owner5]

Keep reporting them to the RRC, it’s their job to take care of problems like this. Is the RRC “The Deep State of Texas”? Try reporting the RRC to the Texas Open Records. Try your Texas Congressman. Talk to other land and mineral owners that have the same problems. If you wanted to sell the property it would have a negative effect of the price.

[23196054]

My understanding after speaking with a land man, Hilcorp bought out XTO, and in turn sold to Comstock.

As I understand from him, as long as the well is productive, or has the prospective of being productive, they don’t even have to speak to you. If I’m incorrect, be free to clarify.

What was agreed on, or who has cleanup and maintenance responsibility between XTO, Hilcorp, or Comstock(?), I don’t know. It seems mineral rights owners would be advised of sales and transferred responsibilities.

[Akranch]

Hilcorp sure isn’t going to clean up anything. They left this Alabama field in eastern Leon county a mess when they left. Pipe line ditches open, wells leaking oil, injections stations with junk everywhere, and several landowner mad… Don’t trust them.

[Akranch]

It doesn’t help. I have Ron Miner with the RRC out here several times. He agrees with me. He takes pictures of everything and reports it in but they never do anything. I have talked to every government agency about this and lawyers. The state said they have no money to do anything. No one can even find the owner of this field now. It’s been years since any production from this field.