Does it show a BTU factor?
Plant Products which can be propane, butane, natural gasoline etc. Is your payment per barrel or gallon?
I don’t have any Reeves County production yet - am under lease with Clayton Williams Energy and don’t know if they’ll drill or not considering oil prices.
Anyway, in Wise County, TX Devon is paying me by the barrel so I don’t know what is reasonable for plant products mcfs. Sounds low to me too.
seems to be a very low price even with today’s prices
Stephen, I often rush to read your posts because you generally have such an upbeat attitude. I do hope, as your landman said, it is not only pretty good, but turns out to be exceptional! Linton
I have a position under a section south of Pecos. We have two vertical wells that we’re drilled by the original operator a couple of years ago. As of April in 2013, the lease was sold and finally they drilled a HZ well after a couple of delays. The rig was moved off around October 8th. According to their landman today they had first production on December 8th and they subsequently have the right to distribute first runs 120 days after the first of the month following first production. Also I should be looking for new division orders. This well was drilled after a couple of delays and has seriously been negatively due to price changes. First production on December 8th and first run by April? All from a well drilled in September and early October, when prices were a lot better. Not feeling so good, except for the fact that the company landman was nice enough to say that the well looked pretty good.
Thank you, Linton. And the best to you and for that matter all on this site. Better days ahead!
Stephen,
Be sure to read the Division Order real close, as this is where some operators have an opportunity to make changes from areas of concern from the original lease language. Most especially the post production costs and where the commodities are priced (ie: mouth of the well).
Great advice, thanks!
The best solution is to insert a lease clause that states that the execution of a division order is not a pre-requisite for the disbursement of royalties.
Also, at Sec 91.402 ©, et seq of VCS is a form division order that meets the Texas statutory division order requirements. Texas courts have consistently held that the execution of a division order does not change nor modify the terms of the oil and gas lease.
Best,
Buddy Cotten
Understood! It’s just that we have had production on the lease for two years.m I’d have thought it would have gone straight into next months runs. The other thing is the delays that resulted in us missing good prices. Just brutal bad timing.
Stephen- That schedule from start to finish is not uncommon. They will often try to complete several wells in an area around the same time, so the crews can go from one to the other quickly. The 120 days is state law unless you have a shorter time in your lease. Sorry for the timing, but I bet the operator has the same regret.
Where is everyone on this discussion?
FYI, the well is included on this month’s statement and in line for disbursement (two months). Color me very, very happy.
We are evaluating acreage that Silverback is not exercising the extension or letting expire. Please contact me regarding leasing.
January, $41…
Is there any update for Silverback and their plans for developing former BHP property. Silverback’s website is very vague in comparison to publicly traded companies. My hunch is the eagle East Toyah Pipeline would provide some guidance for the prperties west of Pecos in blk 4. Would appreciate any feedback from forum members. K
Big congrats, Stephen, so happy for you!! Linton
FYI, permit applications (not counting amendments) in Reeves County for the period Jan 1–Feb 18 mid-day were 42 so far in 2015 vs. 76 over the same period last year.
Over a similar period, RigData’s weekly rig count has fallen from 49 units w/e 1/2 to 37 last week (w/e 2/13). Later – Buzz
Linton, thank you! Hopefully there will be a lot more great wells drilled south of Pecos. The big boys are figuring out how to drill and frac the Wolfcamp. The results now are waaaay better than just 6-12 months ago. Good luck to all and yes, let’s hope for better prices.