I received a call today from the landman of the company that has our minerals leased. They have us on their schedule for drilling a couple of wells. They are also asking to drill a salt water disposal well.
What are the pro's and con's of having this on our land?
Also he said they would pay .05 per barrel. Is this reasonable?
Thanks,
Terry
Terry:
In regards to your inquiry about the pro's and con's of a salt water disposal well on your property, you will recieve compensation for the disposal of the saltwater. On the other hand, your property (surface area) will be subject to any saltwater spills occuring as a result of this well. The damage caused by a saltwater spill can be extensive depending upon the migration area impacted by the spill. If the spill impacts any creeks or ponds on the property, serious remediation work must be conducted. Due the liability issues involved, I would make sure every detail is addressed in the lease. It would be to your advantage to contact a neighbor who has a disposal well and review their lease for ideas. You could also learn what amount others are recieving for disposal. Hope this helps.
They may want to use the SWD well as a commercial SWD well, which makes sense based on what you said.
If they want to drill a SWD well, that is fine. However, if they are trucking the commercial salt water, that presents a lot of problems, spillage being one of them, as Mr. Mallory said. What would kill me is the traffic. You might have 50 trucks a day coming in for disposal.
I would suggest that thee operator build an offloading terminal off your property and a pipeline run underground to the batteries. A pump and a line to the SWD wellbore and you are done.
Charles and Buddy,
As this is in the initial stages and a SWD well had never crossed my mind, I'm now in the process of gathering as much info as I can. I really do appreciate your responses.
When I do talk to the landman again I will at least have some intelligent questions to ask him. I'll probably be back in a few days to ask you all some additional questions.
Thanks again,
Terry
If offsite produced water is to be disposed in the well it is taking on the legalities of a separate commercial business venture altogether. That could be another lucrative revenue center that could continue long after your own wells have declined or ceased to be commercial. If that is the case or even a possibility I would get some expert advice from someone experienced in these matters. For example, the skim oil from produced water can be significant and you might want to include a royalty for such things and any other revenues that are generated beyond disposal fees.
Terry Petersen said:
Charles and Buddy,
As this is in the initial stages and a SWD well had never crossed my mind, I’m now in the process of gathering as much info as I can. I really do appreciate your responses.
When I do talk to the landman again I will at least have some intelligent questions to ask him. I’ll probably be back in a few days to ask you all some additional questions.
Thanks again,
Terry
Terry,
There may be some other things to consider in this situation. It would be important to know into what formation the company proposes to inject. If it is the same formation as any producing wells (or productive wells in the area) you may risk “watering out” existing production that may be paying a royalty to you now. Unless the purpose of the injection is to waterflood a field (which does not appear to be the case), one should be very careful if injecting in to a productive interval.