Would like to hire one of the above. Are there any geologists or engineers on this forum. If so, please contact me.
Liz, There's not a decent geologist or engineer working for minerals owners right now as they are all employed by big O/G companies or have their own companies or trusts, etc. You might be able to employ some of these individuals, but you are going to need some big bucks to do so.
Martha
I work with several geologists here; however, they are not petroleum geologists. In the field I am in I actually worked in a geological company with a man who is a Master's Level Geologist from the University of VA. That reminds me I think I will call the University. If there is one, there is more. Thanks again. I know I say that a lot but I really appreciate your giving me information.
Liz, you may want to go through the Oklahoma Geological Society or the Oklahoma City chapter. If you have some basic questions, I am a petroleum geologist (but not for hire-not violating the rules here). Maybe I can point you in the right direction and save you some money.
Nice to meet you. Thanks for replying. Geologists are such nice people. They also have really pretty stones that make wonderful jewelry. I work and have fun with them digging. What do I need to dispute spacing? I think it should be larger. I was asking for smaller but then everyone explained that if they did not drill on my acreage, there would be no royalties. Is this accurate?
Another question - you refered one of the other members to a petroleum engineer. What is really the difference when it comes to minerals. I work with an entire department of civil engineers and all they do is calculate all day.
Liz, the spacing for a well from a certain reservoir is determined according to several factors. It is based upon the type of fluid (oil or gas), temperature, pressure and type of exploitation. The porosity (holes in the rock) and permeability (how well the holes are connected with each other) of a reservoir are also factors. Oil flows better at higher temperatures and pressures because it is less viscous. Gas also is more compressed and flows better at higher pressures. Generally, the deeper a reservoir is, the hotter and higher pressure it is. It also depends upon if the reservoir is being drained by a vertical well or a horizontal well. In reality, a well drains a certain distance away from the borehole which may be the shape of an ellipsoid (cigar shaped) in the case of a horizontal well or a flattened spheroid (think cheesecake) in the case of a vertical well. However, the OCC will space in orthogonal units which may be square or rectangular and generally line up with how a section can be easily divided. (For you really techie types, I am simplifying here.)
Oil has larger molecules than gas and is more viscous, so it has a smaller drainage pattern than gas. Gas is composed of very small molecules that can travel great distances through very tiny holes and passages.
So shallow vertical oil wells can be spaced at very small increments-maybe 40 acres because the temperature is cooler and the pressures are low. Very shallow wells can be spaced at 5 acres, but that is usually after a lot of infill drilling. Medium deep vertical oil wells are usually spaced at 80 acres. Deep gas is almost always spaced at 640 acres. Medium deep gas is usually spaced at 160 acres. If you do not own the minerals directly in the spaced unit with the well, you will not receive royalties.
Horizontal wells of either variety are spaced at 640 acres to start out with due to the length of the wells. In OK, even a two section-multiunit horizontal well will be treated as if it is two 640 spacing units. ND can space at 1280 or even larger which mineral owners hate!
http://www.owrb.ok.gov/supply/wd/pdf_wd/land_survey.pdf shows how the land survey can be spaced.
I have put several potential wells on here to show examples.
Well A is a shallow oil well (maybe 4000') at 40 acre spacing. If you own minerals exactly within that 40 acres, then you will receive royalties. You can own more than 40 or less than 40, but you will only get royalties over the portion of your rights that lies within that 40 acres. If you owned 20 acres with 25% royalty right there, then you would get a royalty interest of (20 net acres/40 spacing) x (.25) = .125 and you would love that small spacing unit!
Well B is a medium deep well spaced at an 80 acre "standup" spacing. The 80 acres goes N-S and covers the west half of the Southwest Quarter. Again, your mineral acres must be described as within the West half of the Southwest Quarter to receive royalties. If you owned in the Northwest Quarter, you would receive no royalties. If you owned 10 acres at 25% in the SW4 of the SW4, the you would have a royalty interest of (10/80) x .25= .03125. But it you had the 20 acres located under well A, you get nothing from well B or well C.
Well C is a medium depth gas well. It is spaced at 160 acres. If you owned mineral rights in any part of the Northeast Quarter, then you would get royalties. If you owned 20 acres, then you would get 20/160 x royalty rate, etc. If your minerals were in the Southwest Quarter or the Northwest Quarter or the Southeast Quarter, then you get nothing, etc.
Well D is a horizontal well, doesn't matter if it is gas or oil, but I colored it for oil (green). This well will be spaced for all 640 acres, so if you own acreage anywhere in the section, you would receive royalties based upon your net mineral acres. If that well is successful, then it is highly likely that they will plan to drill about five-eight more wells lined up in a row across the rest of the section. You would get paid on those as well. The commission will then assign the amount of reserves that go with each horizontal well.
So it all depends upon what kind of well they are planning to drill and where your description of your minerals puts you in relation to the position of the planned well.
PS. Sometimes they can de-space. This happens when they start with a larger spacing and then can prove geologically that infill drilling is needed and the spacing will be decreased. This will be in the development phase. Hearings have to be held at the OCC and everyone will have their Royalty interest recalculated appropriately.
PPS. You can have several different spacings that affect different reservoirs at different depths under the same acreage. This is why you want depth clauses and limits on pooled reservoirs. It can get very complicated!!!
Does this help you visualize it better?
Huge difference between a petroleum geologist and a petroleum engineer. The geologist understands the deposition of the reservoir rock, its porosity and permeability, the structure, the trap, the migration of the hydrocarbons into the trap, etc. The petroleum engineer is concerned about the fluids in the pores and how they will flow if given the chance. Both professionals know a lot about what the other one does and they work together to plan, drill, and produce the hydrocarbons safely and economically if they do the job well.
