The Delaware Basin is unique among all the producing sedimentary systems worldwide because of the unique nexus of mantle magma pressure relieving faults, fresh water aquifers in place of the inland salt sea they replaced when the Guadalupe, Davis, and Christmas mountain ranges were upthrust through the seabed, and the multiple stacked layers of sediments trapping hydrocarbons. This same stacked shale plays system is repeated three times more in Mexico where it is being exploited by Devon Corporation. One of the places abiotic oil and gas recharging of formations is being documented is in the Permian Basin in Andrews and Winkler counties in wells that were drilled in the late 1920s and early 1930s in the Yates gas field and Seven Rivers oil bearing sands. Iâve been watching this development with interest because I grew up in Winkler County when those old wells were still producing then abandoned and plugged in the late 50s.
That we must wait eons or epochs for recharging of such reservoirs to occur is not yet proven. Mantle magma movement may greatly shorten the necessary recharging timeâŚweâll see.
Fluor progresses on project at Marathonâs Galveston Bay refinery page 27 in the latest Oil & Gas Journal.
This is one of the refineries we (Reeves County) pump natural gas liquids and dry natural gas toâŚwhere it is refined into LNG (Liquified Natural Gas) and put on tankers to supply the needs of countries all over the world that use LNG to generate electricity and cooking/heating/cooling.
I used to be a project electrical construction superintendent for Fluor Global ServicesâŚfond memories of the projects and craftsmen I worked with.
The big mistake is putting such refineries on the Gulf coast where they are susceptible to hurricanes and floodingâŚwhich will cause outages and loss of revenue. Itâs better to do all the refining of natural gas and natural gas liquids here in the Delaware Basin where the weather conditions are more stable so there wonât be any outages and shortages of product to anyone. JMHO.
Our Trust is wondering about the idea that once a property, 56-6, has a producing well on it that property can never again be leased. Can this be true?
Have to get one of those oil and gas lawyers to give you a definitive answer, but I KNOW a guy who owns the surface and mineral rights to Block 13 Section 153 and has TWO producing wells on it, each operated by a separate company⌠namely Primexx for one and Noble-Permian for the other⌠and they are in the same section but different formations⌠so, I wouldnât think your land though lease held by a producing well would keep you from leasing that same land different location for a well in another formation. Your production royalties are formation specific in all operator agreements Iâve ever seen.
AR Foster, it depends on the language in your lease. Does the lease cover all depths? Does it specify the number of acres that a well can hold? Is there a release of depths and/or acreage at the end of the continuous drilling period? If you own minerals in 10 gross acres, does the well include all 10 acres or only 5 acres? If you own minerals in 640 acres, how many acres can the well hold? Is there a unit? Oil and gas leases can be complicated to understand and you must read the lease as a whole to determine the lease status of your minerals.
If you own the surface, then you can lease for a cell phone tower. If you also own the minerals, then you may want to check with your oil company lessee to make sure that the tower is not placed where it could interfere with well placement.
Do you have any idea of how long these wells will produce and how the production will decrease over time? Our vertical wells have really petered out in a short time.
Phyllis⌠depends entirely on the stratification, the size of the reservoir of gas and oil, and the water drive that transports the oil into the bore as the gas cap pressure in the formation comes down to where the well will no longer flow. Then it must be put on a submersible pump or rod pump to continue production. As the oil in the formation becomes less the brine water produced will increase until the well becomes unprofitable. How long it remains profitable is anybodyâs guess but generally follows a predictable pattern for all wells in that area in that formation.
Sorry I couldnât be more definitive or specific to your question.
Thanks Lawrence, You know some of those old wells have been just puttinâ out tobacco money for years just to keep the 1/8 in effect. So I am waiting to see how the Permian holds up on the horizontals. Hopefully our Grands will see a bonanza.
A flurry of drilling activity developing the metes and bounds of producible stacked shale plays with the most gas, oil, and natural gas liquids production for the buck invested, followed by a flurry of upgraded production facilities and transportation (takeaway pipelines to refineries).
It will come in waves with increased contractor activity followed by increased permanent party hiring by the operators. And the whole development of the Delaware Basin bounded on the East by the Pecos River and on the West by the mountains in Hudspeth County will proceed west and both north and south to the Texas/New Mexico border and to the U.S./Mexico boundary of the Rio Grande River.
How are pipeline payments running? I have 2% of an undifferentiated piece of land in Reeves Block 45 Section 46. Salt Creek Midstream is offering $300 per rod which seems low for permanent and temporary easements on 218.18 rods of the whole. Since I only have 2% of this, I hope to do better and was left a message to tell them what I might accept. What do you all think?
KathyâŚyou have 2% of a piece of landâŚis that your percentage of MINERAL RIGHTS on the property? Who owns and utilizes the SURFACE of the property? They are the only ones, the SURFACE owners, who are to get ROW lease payments. Mineral owners get nothing because
the surface is being impacted not the minerals.
Unless you have 2% of SURFACE RIGHTS and have a whole trainload of surface working partners, you will basically get nothing.
Either wayâŚget a lawyer to represent you and your interestsâŚis my recommendation.
I do have 2% of that land, both mineral rights and the top of the land too. It is just undifferentiated so I do not have a specific piece, just 2% of the whole. So I will be able to sign off on this pipeline if it is a good deal.
Surface rights, that is. There are about 10 other owners, some are two members of a family and one is a company called Daltex Munn, which owns the largest percentage.
KathyâŚ
In that case they will HAVE TO pursue you for you to sign a common ROW agreement paying the surface owners per their percentage owned based on a common price ($300/rod I believe you mentioned). Otherwise the other owners will have to form a Surface Owners Legal Consortium to negotiate a common ROW payment and its division.
