Cimarex may be uncertain about drilling plans and not want to lease until it is certain to drill. It will get a title opinion and take a lease from you or someone else will jump in and lease. It is unlikely that you will be an unleased mineral owner. Your rights are not affected by a lease that relatives have made with respect to their minerals.
Paul, At this time I am at Hospital with my wife…it will possibly be later this evening before I can give you an answer. Clint Liles
You are free to lease to any company, at any time. Cimarex took a number of leases in Section 4 and nearby sections around 2014. Cimarex spudded the Jobe 70-20 1H well (42-389-35840) on April 27, 2017. Section 20 is catty-corner to Section 4. If Cimarex decides to keep drilling in that area, then it will come to you for a lease or some other company will jump in to be able to participate. Section 4 is mineral classified and the leases are MF 116600. If you interest is mineral classified, then you own surface and lease as agent for State of Texas which owns the minerals. No way this would be left out.
For a mineral classified tract, if you sell your surface, then you lose out on any leasing.
You should have disclosed the fact that your tract is under lease as that is a material fact which affects any response. Cimarex does not owe you any information with respect to this tract and it plans and you must look to Jetta as your lessee. The State of Texas will not owe you any royalty payments and will not pay you. Most likely Jetta will participate in any well and the operator will pay, but not necessarily as your lessee could opt to sell its share of production and pay you. When you do not fully disclose the information, then the comments are not necessarily accurate. I understand how anxious you are to learn things, but you need to be more forthcoming.
Steve-
Generally section line boundaries seem to have a bigger impact on well orientation than geophysical issues. They are usually oriented to try to eventually get as many wells squeezed in as they can.
Emery, no confusion here - I’m just giving examples of the 3 times where landmen found us and the one time where they fell short. We have mineral rights, oil and gas leases and pipeline ROWs. My issue is that a partial lease was granted on one section and continues in force. I can see some logic in an E&P company not leasing a section at 100% but what happens if they extract minerals. I would be owed royalty payments but would not be a participant in the lease.
Kevin -
I’m having difficulty following you. Are you saying you own mineral rights in the Section or Unit that was drilled, but haven’t received any royalties?
Do you own mineral interests in the entire Survey or just part of it?
Are your lands included in the Unit for that Well?
And, I don’t understand your last sentence: “I would be owed royalty payments but would not be a participant in the lease.”
The only way you can be owed royalties and not be a participant in the lease that I can thing of offhand is if you own a Non-Participating Royalty Interest (NPRI).
Maybe you need to Lawyer Up.
clint-- heard anything pertaining to blk 2, sect. 31 ???
paul
Let me try and clear this up. I have mineral and surface rights on Section 4 Block 70 and Section 12 Block C17. The property in question is Section 4 Block 70. This is property that my great grandfather purchased about 100 years ago and the extended family owns undivided rights. Cimarex leased the property from some of my relatives 3 years ago, but not from me or my brother. I don’t know why. If they drill and extract (they are paying the others the 4th year delay payment) what are the rights of the other lawful owners that did not participate in the lease?
You can sue the crap out of them, although as TennisDaze wrote earlier, they would likely come back and finish up leasing everybody before they drilled.
Have you been paid your fair share for the pipelines? If not and they have begun construction, you have legal recourse.
@ Charles and Wade - Thank you for the replies. I can understand using the maximum distance allowed by the section lines. Just thought it curious. I asked the operator and they said they have no plans to go perpendicular to existing laterals. We have been getting many offers to purchase in the last few months so due diligence is the game now.
Hey Steve -
Someone much more knowledgeable about such things, like an Engineer or something, could probably answer your questions more clearly, but I have noticed that in a given area production appears to be more successful when the laterals are at an angle as opposed to straight North and South or straight East and West. And I have never seen them change directions and run perpendicular at a lower depth. Although I suppose they could, they would probably prefer to use the then existing infrastructure (Roads, Drill sites, Storage Facilities, Feeder Lines, etc.) to develop another depth or formation.
clint-- turn down 16 K acre mineral
paul
Charles - did get paid for the pipelines, so I’m good there.
TennisDaze - definitely not selling, have only a small interest but this is nice found money and great fun.
And thanks to all for the professional help. I know only what I’ve learned from the landmen I’ve dealt with.
Part two of my question would have been that based on the Cimarex situation, I just leased Section 4 Block 70 to Jetta Permian and probably did better (or at least as well) on the lease payment. From what I’m reading below, between the State of Texas and Jetta, I should be compensated if Cimarex extracts from that Section.
Really appreciate the help.
TennisDaze: my intent was to understand the first question before asking the second one - that is all.
does anyone know the going rate for seismic ?
@ John,
We just had a seismic survey completed a few weeks ago. The rate was $20 an acre. That may be high or low, I do not know.
Just had a landman tell me a friend of his told him that they would probably never develop section 247? Anyone got any information on this ??
Well was drilled a few months ago H&GN Sec 52 - Royalty payments are higher than ever before. But, will they continue or taper off as they drill more horizontal wells?