Statoil and shallow wells

Has any one heard any thing about Statoil leasing to other companys to drill shallow wells so they can keep the leases tied up with very little cost. Example one shallow well , holding up 600+ acres.

Hi Mike -

That is not unusual in the industry and not especially a conspiracy.

In simplest terms, a Geologist determines where they want to drill and then the company sends out a Landman to determine the status of the land / mineral interests - whether they are presently held by production (HBP), under lease or open and available for lease.

When the lands are HBP or under lease, the company that wants to drill will contact whatever company owns the leases on the land and negotiate a deal with them for the depths they want to drill to.

Perfectly normal activity in the oil and gas industry.

Hope this helps -

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas