Pallas Energy

I signed a lease with Pallas Energy back in 09/2016. Just recently found out EOG put up theTonkawa unit a few miles away on Stokes rd, My property is located in the corner of Austin, Fayette and Colorado County in Frelsburg. Does anybody know what the outlook is. My neighbors also signed up with Pallas. Thanks,

Your right, EOG took over the Tonkawa unit after Pallas had drilled what looked like a deep research well there. I'm assuming EOG was behind what Pallas had been doing but didn't want their name exposed until the leases were in hand.

After they took over EOG added a horizontal leg on to the existing well and someone nearby heard they'd made a good gas well there. From a side road you can see they've built a tank battery but a completion report hasn't been filed yet and no production has been reported to RRC or the sales tax office.

Some folks were thinking what EOG does there could help define the reach of the new Austin Chalk play going on in Washington and adjoiing counties, but if they follow the same pattern as some "stealth" deals they've done in other areas it will be a while before we know what they have there.

RRC shows the Tonkawa as Shut-In. It looks like the closest gas gathering system may be 4+ miles away which could be the hold up, or EOG may be sitting on it so they can keep everything tight. They haven't permitted any more wells in that three county area.

Do you know if most of those Pallas leases included options or flat 3 year terms?

It is a 3 year lease with option for 2 more years.

Chris, saw on the other site you think you might be close to the Tonkawa unit.

In case you haven't seen it I'll try attaching the plat EOG filed on the unit. I'm thinking you may be about mile east of it, which is lots closer than I am.

I was by there 6 weeks ago but would definitely appreciate an update if you can check what's going on there. EOG keeps the entry off Stokes Road locked but you can see the well site if you go down the road that turns west off Stokes and runs along the north end of the unit.

5-EOGTonkawaUnit.pdf (717 KB)

Thanks Dusty. I am in the A-419 Mcmillen,. I see they have a surface notation on it. Do you know what it means and what do you think my chances are they will hit on my property. I was out there 2 years ago after I signed the lease. I live in Webster Tx which is about 2 hours away.

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Hard to say what happens next. Folks speculated the Tonkawa was the spot EOG picked for research that could direct what they decide to do over a broad area. If that's true, and depending what they learned from it, their next step could be drilling a second test in another part of their lease block, possibly a long way from the Tonkawa.

A few years ago an EOG stealth play in East Texas involved leasing 200,000+ acre over three counties and drilling three research wells, but ended with them dropping everything after crude prices cratered.

If most of the leases Pallas/EOG put together in Fayette, Washington and Colorado, or Austin County included options they aren't under pressure yet unless the overall area is so large that lots of drilling will be required to keep the block together.

If you know anybody who lives near the Tonkawa ask what they are seeing and what kind of rumors they've heard.

Thanks Dusty. I just have fun tracking this.

There are a lot of rumors circulating about the Tonkawa well, hard to know what the truth is. I have heard rumors from it hasn’t even been completed yet to they have made a 30 mmcfg/d well. Anyone?

I have heard that they are a year out from fracking because they don’t have enough people, This problem exists in west Tx, Just a rumor. On a positive note, since they drilled horizontally, you would think they found something.

EOG should have no problem getting a frac crew to stimulate this well. Frac crews aren’t as tight in the Eagleford trend, and EOG has plenty of sway. Based on how secretive they have been with this well, I have to think they found something pretty good here.

I agree. I believe it is a matter of time before they put up a second rig.

EOG has yet to permit anything else on the Pallas block or on the Jeter Block in the Lavaca/Colorado County line area. Have you heard anything about the well from your nearby neighbors who are in the unit?

So much head scratching is going on about this well. There is a possibility that the CO2 content is too high for the area pipeline spec and EOG is working on gas treatment facilities etc, all just arm-waving and speculation at this point.

I think they are just sitting on it. The will have to splice into an existing gas line at some point. I think Phillips and Kinder have gas lines in that area.

Seems strange that they would “sit on it” Any word on them picking up more leases in the area?

I don’t live out there. I just here the rumors like you.

Anybody hear of anymore drilling in Colorado County.

Thanks Darryl

Any word on how much gas the well is making? Thanks.

It’s extremely tight lipped. They still have security at the front gate. I drove on the road behind it and it looks like a small City. Another pipeline is coming down from Burton Latium area it’s progressing towards a destination of Stokes Rd

I would suspect this well will yield almost all gas and little to no oil. It may be wet gas, and it probably has CO2, so it is possible that the huge box is part of some gas treatment equipment that is necessary to meet pipeline spec. Anything else going on out there since your last update?