I have minerals in Section 2, Township 13N, Range 19W with a couple of producing wells. The McLaughlin #1-2 and Frazier #1-2. I received paperwork that Nadel & Gussman and Vogel Exploration are attempting to obtain consent from Unit Petroleum and Tecalli Exploration (not my section) to drill horizontal laterals to develop such formations and request the creation of a 1280-acre horizontal drilling and spacing unit.
My question is how likely will they get the OCC to grant a waiver of consent? What would that mean to me in the future? I received an offer to buy our minerals in that section for $200,000, so I’m assuming there should be money in the future if someone is willing to pay that much now.
Fairly likely it will be approved. Nadel & Gussman have a rig drilling just to the NW of there. New Cherokee play for horizontal wells is quite active right now-also Des Moines. The general time frame is for the operator to drill one horizontal to hold two sections (probably 2 &11). They drill up their leasehold with one or two wells and then come back later to drill the infill wells. Your royalties are likely to increase with horizontal wells since the perforations go from tens of feet to thousands of feet. Your assumption about the future is probably correct. Nadel & Gussman just completed a Des Moines in 10 &15 to the west of you for an 8 BCF estimated ultimate recoverable, so very encouraging.