Steve, the offer seems low. Tread gently.
Will,
The answer to your question depends upon the permeability of the formation being produced. Tight (low-perm) reservoirs produce only localized hydrocarbons. The purpose of fraccing is to increase the permeability and the distance that oil can flow to get to the wellbore. If a frac job is too big, the additional oil might not pay for the bigger frac. In addition, the frac can penetrate up or down into a water-bearing zone. The water will be produced and bypass the hydrocarbons. These factors limit how large a frac job will be. The minimum number of feet to the lease line is a āone size fits allā solution that was put into place long before unconventional (fracced shale) reservoirs became the norm. In summary, there is no exact answer to the question. If the same operator is drilling on the adjacent lease, the operator would have less incentive to make sure that the adjacent well is not producing oil that your lease might produce. When the operators differ, they have more of an incentive to avoid that.
Mike, per the linked Seeking Alpha article on Rosetta further down this page, field rules were changed four months ago, now allowing perpendicular offsets to get as close as 200ā from lease line. Hope this helps.
Will,
Spacing Rules (Rule 37) set the minimum distance between a well and adjacent property line no closer than 467 ft. The 200 ft number you are thinking of is the standard distance usually stipulated in a Lease between a well and any house/barn on the Leased premises.
There are Rule 37 exceptions whereby a Well may be located nearer than 467 ft, however, the RRC must approve the exception and the adjacent property owner must be notified and is entitled to appeal/contest the exception.
Whether or not you are being drained even at 467 ft is somewhat contentious. Iāll leave that question to others who know better than I, but will say that the RRC Rules are there to prevent waste of natural resources, as well as protect the rights of the correlative owners over common reservoirs. You may consider increasing your offset well requirements in your lease to be on the safe side. 600 - 1000 ft is within reason.
Wade- are you familiar with the location of CWEIās 15,000 ac. block? Weāre in Blk.13 Sect. 219 and Iām curious if our CWEI lease is part of the Caza deal.
Stephen,
Thanks for pointing that out. I went back and found the Order for the Bone Spring/Wolfbone Field rules, and it looks like the First and Last take point can be no closer than 200 ft to any property line, however, the perpendicular distance from any take point on the drainhole must be a minimum of 467 feet from any property line. If I understand this correctly, it means that that although the first and last take point can be 200 ft from a lease line, the lateral can not be closer than 467 ft to a lease line, meaning the owner of the adjacent section does not have a horizontal drainhole 200 ft from their property, but the owner of the sections to the North and South do have take points within 200 ft of their property line. (Assuming well is drilled North to South) Is that correct?
Steve, most people say donāt sell at all. But, of course, personal circumstances change that recommendation. So if you must sell, then make a counter offer. I venture to say that few of us here would sell for anything near $2500 an acre since lease rates are often higher than that and sale rates should be much higher than lease rates.
maybe iām blind but i read his post as countering an offer they had in hand.
If i were going to sell my minerals, iād call the operators in the area as they all have the really big bucks. BHP, Resolute, Andarko, Cimarex, Shell, etc.
by the way, Liz Mās post says she would sell for 2500. left out the word ānotā
you are correct Steve C. Weāve been offered 8k per acre recently and I told them to take a hike.
Is your property currently under lease? there are long term financial ramifications here that might pan out for you really well if you hold on to it. course if you need the money badlyā¦
also just spoke to cimarex. they called on an swd weāre contemplating. he said itās not in their fairway at the time but that he could easily find a thousand people that will offer more than $2500.
Press releases (see earlier post for Buzzā links) did not have a map but say western Reeves, so I doubt Blk 13 is included.
But Wade, who would you ask? Point is that Steve C probably has no idea of how to make contact with legit people wanting to buy minerals. It is not easy.
Iām noticing that a number of you are considering selling your āsmallā interests in Reeves. If you are serious please send me a private message.
Thanks, Wade! Linton
Catching up after a few days, so sorry for the delay in responding to some of the posts below. The best price on sale of minerals I have heard of in the area is $12,000 per net mineral acre for non-producing but leased property. The CWEI deal with Caza is curious. Caza is a penny stock company that issues a press release every time somone blows their nose. I wonder where they will get the capital to develop 15,000 acres.
The press releases about CW and Caza that I read talked about undeveloped acreage along the western flank of company holdings - not the western flank of the county. I have no idea what acreage CW holds so have no idea if the western flank of company holdings corresponds to the western part of the county. And Iād love to know! We are Block 13 Section 185, and while there are wells all around us - some of them CWās - they have not drilled or even permitted us yet so we could be part of their āundeveloped acreage.ā Of course, our lease does not expire for 15 months (give or take) and so we didnāt really expect drilling yet. But Iād love to know whether we will fall to Caza.
Steve, just my opinion, but I think thatās way low. Linton
Wade and Liz M. - Thank you for replying. I read the same thing as Lizā¦Western flank holdings, not Western county. My gut feeling tells me the Caza deal is located āsomewhereā West of block 13.
Steve C - if you are dead set on selling at $2500/acre, call me. Iāll buy it. Personally, Iād ask for $15,000/acre.