New Info on Lease Offer for Block 55 Twp.7, Sec. 16

For owners near the above area, I have some final information on a thread about this property from back in June. (FYI - That thread has the same title as this one.)

At that time, we were offered $1500 an acre for this property by Scarlet Land Services. At that time we were told the offer was a good one because the other owner of half of our acreage was Chevron - and the Chevron half was held above around 14,000 feet because of a well on another section owned and leased by Chevron.

But we were skeptical and turned them down. Afterwards, I did a lot of research into the claims that Chevron’s half was held above 14,000 feet (or so). I could find nothing to substantiate the claim. I even checked each of the many sections in a 1996 Chevron lease and could find no active wells. However, I did find an affidavit of non-production and non-development registered with the state in 2008 for the properties in that old lease.

Scarlet returned again recently with the same offer. This time we asked for the name and location of the well holding Chevron’s half. They gave us neither but now said that we should be grateful that anyone would want to lease us considering that Chevron is the other owner. Also that the only thing this property is good for is getting a bonus because of Chevron’s ownership. Anyway, we have turned them down yet again. And they fired us - offer withdrawn. :smile::smile:

It may not be easy to lease the property with Chevron as part owner. But Chevron does drill in Reeves and has leased some acreage to other companies in our part of the county. We are in no hurry. I still wonder why the heck Scarlet was willing to pay anything at all to lease us. Companies don’t spend that kind of money for no reason.

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Family has interests to your west near CR328. Did Scarlet say who the principal was? Sounds like you were left with more questions than answers. Are we talking mineral or royalty deed? Where’s the deed or title report to support their claim? I’d ask for it. Where’s this old Chevron well? What’s the lease name? Are there even any old Chevron wells in the area still producing? I’d be surprised to see a depth reservation in a mineral deed, except in maybe a recent one due to today’s horizontals. I’d have lots of questions.

Chevron’s November Investor Presentation may offer some clues. Slide 32 shows a map of the Permian holdings.

I drove down from NM with husband and niece to visit the Davis Mountains for the weekend. I will see if there is anything new in the area.

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Scarlett knows something you don’t know and are trying to make some big bucks from your minerals…good for you…you weren’t intimidated.:+1:

Clint Liles

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I should have mentioned that Scarlet wanted to lease our minerals. Very sorry! When I wrote the post initially, I had a link to the earlier thread that had more detail. But then I took out the link - forgot to add more detail in the new post.

We asked Scarlet who they were representing and they ignored the question. They don’t seem to have a history of representing any of the bigger oil interests, according to leasing records I checked out.

There is no active well in Section 16. So we asked Scarlet to identify the well supposedly holding Chevron’s half by depth. They ignored that question as well, instead changing the problem with our property to the fact that Chevron simply held the other half. (Chevron does indeed hold the other half.) But there appears to be no production encumbrances on Chevron’s half, in spite of Scarlet’s first claims.

Scarlet gave us the old 1996 lease that included many Chevron sections as evidence that Chevron was held by production. Chevron’s half of our section was included in that old lease - but the lease seemed to include a Pugh clause that limited well holdings to the section they were in. And anyway, we could find no producing wells on any of the sections named in that lease.

I don’t know your section but there is some leasing going on in our area, some of it by Apache. I don’t think Chevron has leased out any of its area properties recently but they did lease some out to the SE of us a few years ago.

I suppose it’s possible something big is going on, but Chevron really does hold a lot of the sections in this area. There is a lot starting to happen a few miles away in many directions. But as far as I know, most of those properties are not owned by Chevron. No one in our immediate area is going to have much luck with long laterals without the cooperation of Chevron.

Our property is unusual in that Chevron holds only half. Mostly Chevron holds the entirety of sections.

But Scarlet wanted us for some reason. We will wait. :sunglasses:

Liz M – Apache is currently drilling their 3rd well in SEC 10 (catacorner to your NE) -– NAVAJO #601H – testing the Phantom (Wolfcamp), spud10/31. Earlier this year, they drilled an Alpine High test and then a Phantom (Wolfcamp) test. Hope this helps. Later – Buzz

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Thanks Buzz! I knew they’d drilled a test well and immediately thereafter permitted another well, all very promising. But the last I knew it hadn’t been spud. That’s great news.

I think Apache also holds the NE quarter of Section 16, touching Section 10. We don’t own any of that area; neither does Chevron. And Chevron did not own Section 10. So it was probably pretty easy for Apache to lease those areas. We are waiting to see what it all means for us.

Thanks again for the great news. :grin:

Liz M – this is probably irrelevant but there was an old well on SEC 17 to your west, the REEVES “BM” FEE #1. That well spud in 1983 and completed in !984 was a gas well by Texaco – the former owner of the now so-called ‘Chevron Minerals’ in Reeves (and other Texas counties). I can barely read the label on my ‘Ownership Map’ that states “L Miss Disc”. The well has since been plugged and abandoned.

Regarding Apache’s Alpine High (Woodford “A” interval) well on SEC 10 – NAVAJO #101AH (their first well) – on IP (Initial Potential) test it was not all that much to write home about, yielding only 1,704 Mcf/d of dry gas… for some odd reason, thru only a 2,773’ lateral. Later – Buzz

Yes, we know about the plugged well on Sec. 17. We don’t think it was the alleged problem because that well came after the 1996 lease would have expired. And it was drilled by Texaco itself.

As far as the Navajo well - it was permitted to 16,000 feet and it’s unclear why it stopped at such a shallow depth. We’re figuring that maybe seismics (or something) have encouraged Apache to try again. There are some nearish wells that do fairly decently, oil-wise, so maybe Apache is hoping for both gas and oil. It’s all pretty interesting to watch!

Liz M – firstly, the well was drilled as a vertical “exploratory/test well only”. Secondly, the well was then completed as a horizontal in the Woodford “A” interval. The well was drilled to a measured depth (including lateral) of 18,361’. For whatever reason, only the second half of the lateral (18,262’-15,489’ = 2,773’) was tested. I did not mean to insinuate that ‘it stopped at such a shallow depth’. Later – Buzz

Buzz, very sorry! The mistake was mine. You were clear but I was not familiar enough with industry terms to understand what you said. Thank you for all your help and patience!

The second to last slide of Apache’s 6-618 presentation is a good guide to the area’s mineral ownership/leaseholds. Yellow looks to be Apache. Light blue, Chevron. I think gray, unheld acreage. I haven’t figured out the others. Can anyone make the rest out?

That Texaco Reeves “BM” Fee well was permitted in 1983 and plugged in 1989.

So did Chevron acquire all this mineral acreage by way of Texaco? In that Chevron presentation I posted earlier it says “80% acreage no or low royalty.” That sounds like they own the minerals outright?

Zooming into the map makes it much easier to see and useful. You can locate your section by counting number of sections from the western county line. Use the RRC map or GLO map to determine that. Then cross compare to this map.

You can see your NE/4 in yellow, indicating Apache, like you mentioned earlier. The dark blue lines appear to be gathering lines. So I imagine you and the sections to your north should be getting approached about easements as some point. It looks like they are bisecting sections from west to east.

Kathy9 – yes, Chevron owns the minerals outright, obtained when they bought Texaco in 2001. To a large degree the minerals correspond to surface held by Texas Pacific Land Trust… … they all used to be together. Later – Buzz

I haven’t had time to try and match colors but Noble and Primexx own large areas a little distance to the east and southeast of Sec. 16.

And yes, there are gas pipelines through Sec. 16. At least one of them has been there for years. I don’t know about the other one but there appear to be two now.

I can’t tell if the blue lines indicate additional new pipelines or the already existing ones. It’s true the blue lines don’t follow the path of the existing pipelines but that may be because the map is very simplified. However, there are plenty of new lines and facilities planned just to the east of us.

We don’t own the surface so no one will approach us for easements.

We were approached earlier in the year about an easement and then didn’t hear back. So I wouldn’t be surprised if the route of pipelines in that map are simply preliminary.

It looks like a large pipeline is planned to pass through one to two sections to your east. I believe this is the Salt Creek Midstream natural gas liquids pipeline.

Yes, it appears the Salt Creek Midstream pipeline should be quite near. Also, it looks like there are plans for a cryo processing facility pretty near as well, at least according to the Apache report you linked. So there’s plenty happening in our general area.