Mark 1H-27x Well Completion Report…467 oil 782 gas
Here is the completion report. The test date is 3/25/2017.
The most recent pooling in S 19 was for $200 3/16 for NW/4. Several more are pending. No leases have been filed for 6 in the last two years, so you might want to take it a bit slowly. The first horse out of the gate is usually lower than the final one.
Hi Linda R: I guess that you have already been apprised that Newfield has filed a Completion report (file 1002A) on the Mark 1H-27X well located in Stephens Co. with a bottom hole location at Section 34 2N 4W. They filed with a first sales date of 1/24/2017 with an initial test date of March 25, 2017. The initial test data is from the Springer formation, 467BBL/day, 46API, 782MCF/day, 1675CuFt/BBL ratio, 189BBL/day flowing. The test data usually comes in greater than the first few months production so this isn’t going to be the gusher we hoped for. I saw on some report today that this well was 89.2% in section 27 and 10.8% in 34 but I can’t find the page that revealed these figures so it may be incorrect. Anyway I guess we should get checks however small for our found monies. Let us know if you find any better data. Don Fry
Great info. I asked about this on a different thread. You are very helpful.
Don,
http://imaging.occeweb.com/OG/Well%20Records/030DC2B3.pdf
R Story has this link in E. Harris’ discussion above. 34 got the short end of the stick.
And to mineral owners involved, beware of Newfield. My deceased, attorney/judge father left a trust, backup will etc. defining heirs (sis and myself). We were forced into a very long legal battle to get 3 yrs of royalties on the Yandell wells. Not a USER-FRIENDLY corporation.
I flew by northeast Stephens County today. There were three drilling rigs in 23-2N-4W and one in 18-2N-4W.
I’ve got 3 leases expiring this year in Stephens County, 31-02S-04W, 09-03 S-04W and 26-02S-04W. How far out should I be checking with the companies whether or not they are interested in releasing or should I just let them run out? On another note, how soon does a person find out if they have an active well? I haven’t heard anything from either of the companies.
JDrig, there do not appear to be any active wells on these three sections. Never hurts to ask the current lease holder what their intentions are.
Follow this link to the imaged document page of the OCC and then go to the second selection, Oil and Gas records forms. Enter your section info and it will pull up the history.
Sec 6-1N-4W lease offers? I received a call offering $2,250 acre with 1/5 for 3 years. Any other offers out there? I haven’t leased in Stephens for a few years and not sure where the market is now.
The bonus and royalty percentage may not be the most important part of the lease. Take the entire lease into consideration when negotiating the lease. I’ve been working a month negotiating the language of the lease and exhibit 'A" modifying the language of the lease. We had reached a $ and bonus amount within the first few days.
The previous lease on another property I spent 2-3 days negotiating a deal and 2 weeks negotiating the terms. Prior to that, I spent 5 months negotiating and eventually turning down other companies on this section. In the end I received 3x bonus along with about 17% more royalty than relatives did in month #1. Plus I received a better lease. They ended up with a good deal at the time the lease was negotiated. I took a risk that the interest in the area would remain and grow instead of dropping off. In this case it paid off.
Another lease negotiated about the same time: I had offers to top lease it. The rest was very similar to the above. 2X the bonus along with another 7% royalty.
None of these above properties have a pending OCC application. In most cases, an application will trigger more competition for your property.
There are so many things to consider in leasing and the above is only a small part of it. The amount of acreage, money involved, and your personal situation can have a very large impact on what you do.
We are held by production on many leases, that I would love to have the opportunity to renegotiate.
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There is a wide range of language used in these clauses that changes the game. Do you need a Pugh on a 5 acre tract (tract not their NMA)? I doubt it, but likely they will easily give it to you. Strike the existing warranty clause and you are still subject to contract law or implied contract law. Add a warranty clause that absolves you of warranty, express or implied, and you may reach your goal. Tough to get, but that is part of the negotiation process.
I’ve seen super leases that are fantastic for the Mineral Owners. Sounds good, but it is hard to find some of these in actual use! Maybe there is a Memorandum of lease filed and we won’t see the lease filed. But that is a whole different topic.
But, we can never forget we have to be partners in this venture. I can’t afford to drill a $9M well, and they need my property to produce it. Most of us don’t have enough acreage to keep them from drilling on us. Normally, we don’t want to negotiate ourselves out of a lease. We have to keep in mind they can force pool us. BUT, they also risk having a non-operator invest come in and lease us and reduce their overall profits. We risk not getting paid a bonus on a lease that has a very good chance of expiring without being drilled. I have been told that less than 30% of leases ever get drilled. In our properties it is FAR less than 30%. Being pooled may not be that bad. You basically are under a 6month (or 12) lease only holding the zones listed. But you are don’t have some things defined that may or may not be an issue.
The lease bonus paid to the owner can be small compared to the end price. I’ve seen rights to the Woodford format alone that was HBP by a different formation be sold to a much bigger oil company for 20x the price on the pooling of the original well.
There is just so much more about this business that I don’t know! It is a continues education process.
Thanks for the link and info.
Sounds like a pretty good offer to me but if I were you I’d ask for $2,800. or so. All they can do is say no and then you can always accept that one if that’s what you want to do. It seems to me they usually start out low so they can have a little wiggle room. Have heard some say they just wait for pooling orders and with all the wells they are drilling down there it might be higher but you run the risk of them not drilling and not getting any bonus. That’s only a couple of miles I believe from our section 34 2n4w is and they offered us $1500 an acre for a 1/5 nearly 3 yrs. ago I ask for $1800. and they jumped on it so fast I thought I should have asked for more. Now they have messed us up by only drilling our last well just 700 ft. into our section so it’s now held by production by that tiny bit so we’re really glad we got what we got for the bonus. If they hadn’t drilled we could have probably released in May for a good amount. Don’t think anyone knows for sure what you should do for sure but isn’t it a fun decision to have to make? lol
Stephanie,
Some of the comments are more for the others reading this than you. Excuse the rambling, typos, repetitions. etc.
I usually end up using the Lessee’s parent lease to start with. While I have negotiated a different one, it is usually easier to get them to manipulate their lease. Deductions is the hot one right now.
*Deductions, Seems to be the biggest hurdle
*Warrantee, Most want to put ALL of the responsibility in my lap to guarantee their title work. I have decent records on many of our properties. When THEY ask ME how many acres we own, I’m automatically looking for ways to reduce my risk instead of shouldering their risk.
It is not uncommon for companies to have a list of clause they can use. I’ve seen a document that listed 6 Warrantee clauses in decreasing order of responsibility on the Lessor. The first level landman had the authorization to pick the first two. His supervisor the next two, the company landman the next and let’s go talk to the legal department to get the last one approved.
Maybe I’ll warrant title but not that it has been encumbered by an existing lease by production. Case by case.
Depth, Let’s only hold producing formations, not those that you penetrate and MAY come back to later, 3 generations away.
Pugh
Defining commencement of operations. A stake in the ground? Application for spacing? How about a rig capable of drilling to the permitted depth on site with the bit turning and making progress to reach that depth? That last one sounds better to me.
Shut-In
Access to title information concerning my ownership contingent on discrepancy
Well data (minimal)
Application order of payments rendered by lessor/operator to be credited to interest and late royalty payment before current payments due.
Reserving an a lean on the interest conveyed to ensure payment
Removal of option to primary term
Mother Hubbard clause
Removal of top-lease clause
I’m always hesitant to post lease or exhibits. I sometimes know what some operators will accept or reject. What I use on one lease may be different from another. Deductions are a big issue right now.
The name placed on a clause does not fully define the clause by itself. Too often I hear people say to get a depth, no deductions, pugh, strike the warranty clause, etc.
HUH??? You guys talk over the head of this peon! So now I have a question for you.
A friend lost his dad 14 yrs. ago who owned the mineral rights on a section on which Newfield now plans to drill 8 more wells. There was one old vertical well on the land which was drilled in the 1960’s. His mother passed away about 5 years ago. A couple of years ago they contacted my friend and told him they had money for them in his dad’s name for the first horizonal well they drilled a couple of years ago. They said that the minerals were held by production since that first well in the 60’s (owned by Triad with a 1/8th interested and so that is what they paid him and what the heirs are stuck with. My question is "They couldn’t hold the whole 640 acres by production by that one little vertical well in the 60’s could they? " My thinking is that well probably only had at the very most a 40 acre spacing. My friend said they never received any papers about the first horizontal well 2 years ago and he would have been the only one handling his dads affairs. I had thought that maybe they forced pooled his dad and maybe sent the papers to the address where his dad lived last but the friend said no they had a post office box that they still have and check often. So how can they hold the friend and his siblings to the 1/8th interest? Any thoughts on this anyone?
In the case below the well in the 60’s wasn’t even drilled by Newfield or any company they bought out like Phillips.
Linda,
The short answer is yes they can hold a 640 with a single well…vertical or otherwise. It depends on how it was spaced as it pertains to the producing interval(s). I can look it up if you know the S-T-R and more specifically answer if your friend was HBP’d or pooled.