I recently received correspondence concerning a group of 7 permitted wells. The RRC site shows the wells are permitted to be drilled in A-208 in Martin county and terminate in A-1380 in Midland county. All the wells have assigned API numbers that start with the county code 329 (Midland county) - the termination point.
Can anyone shed any light on why this is. It seems like the well should be named based on where it is drilled, not where terminated.
Look at plats and see where the first takepoint in productive lateral will be. There may be no production attributable to section where well drilling starts and therefore mineral owners in that section will not receive royalties.
Well names are 100% up to the operator.
To clarify, the county API will be based on the county where production is derived. If the well would produce in both counties, then I would expect API county to be where drill site is located. Post the well and API and you will get more detail.
Question TennisDaze, Have you seen any lease addendums, for mineral owners, where the surface location is for a horizontal well that is not within the “take point” that provides royalty for their mineral tract?
No. If a tract is not included in pooled unit or producing, it would have to be negotiated as ORRI burden on your lessee and have to specify how the DOI would be calculated. It could not reduce DOI for tracts where minerals are producing. Also operator and lessees may not be same on adjacent tracts or sections so your lessee may not be in the well. A surface owner can consent to use if surface and well site damages for well on adjacent section and underlying mineral owner and lessee cannot prevent that, at least as I understand recent case law. But you can try to negotiate anything.
The permitted wells are 329 46726 thru 329 46732. Drilling location is in Martin county A-208 with termination in Midland county A-1380. I know how to bring the wells up on the GIS viewer and, thanks to another post, now understand how to bring up the permit. But, how do I access the plat?
For the plat, once you find the drilling permit you can then find the W1 which will have towards the bottom, a list of attachments that you can click on and get the plat. MK
Thank you very much for that clarification! I have viewed the plat for 329 46726. It appears to me they define the first takeout point as about 100 ft north of the termination point of the well and the last takeout point as about 150 ft south of the drilling point. It appears the bulk of the pool is in Midland county, although they appear to be planning to produce from both Martin and Midland county. I am still not sure I understand the naming convention. Curious why the first takeout point is the furthest from the drill site.
The well location is in Midland County - on plat labeled SHL for surface hole locatoon. BHL is bottom hole at the end in Martin County.
TennisDaze,
Thank you for your response. Your mention of the BHL and SHL and a re-examine of the plat finally allowed me to realize I have been looking at these wells “backwards” so to speak. When I first started researching my holdings, I was using the GIS viewer to find “contemporary wells” that were drilled more or less straight down and therefore the “dot” on the map that one can click on for well details represented both the location of the top of the well and the bottom of the well for all practical purposes. When I started looking at horizontal wells, I just assumed the “dot” represented the location of the drilling rig and the start of the well. After all, when using a map isn’t one interested in locating where structures and equipment are located and not a hidden point deep under ground where the drilling ended?
Now, I understand that if I am looking at an abstract that I Have holdings in and see a line representing a horizontal well, I need to trace the line to both ends. The end where the line just stops is the actual site of the well. If I follow the line to the opposite end to find the “dot” I can click on for the well details, that is actually marking the point deep under ground where the drilling stopped.
Do I finally have this right?
If a surface owner owns 100% of the mineral rights on the drillsite tract, in say Texas, they should be able to ask for a percent of the production from the companies interest that leased their tract and interest I would think. ??
Not necessarily. Frequently, the surface location for a horizontal well is not in the spacing unit for the take points of the well. The operators do not want to waste the turn radius (where they cannot perforate) of the well in a unit, so will have the surface location in one unit and point the well in a different direction into another unit so that the perforations can be maximized.
If the surface owner owns 100 % of the minerals on the surface tract that is used for the drillsite of a horizontal well and the take point is not under this tract they should be able to require the companies to pay them a royalty fee from the companies interest. There could also be more than one drillsite on the same drillsite location. ???
Again, if the perforations are not under the surface tract and not in the drilling tract, then no royalties to the surface owner.
Yes, there can be multiple wells drilled from one drillpad, and even multiple drillsites in a surface tract. The surface owner has a surface lease where they are paid for the use of their surface. If their minerals are not part of the drilling unit, then they will not get paid for any royalties for perforations on the other side of the fence.
If a surface owner own’s 100% of the minerals they can have a no surface operations conducted on the surface. I’ve done this multiple times in the past. A surface & 100% mineral owner does not have to lease, Right? Then that would have it covered.
A surface owner has the controlling right to consent or not consent to use for an offsite well location that will not produce from the underlying minerals. The mineral rights are dominant if the surface is to be used for production from the underlying minerals and the mineral and surface rights are severed. If you own 100% of minerals and surface and opt not to lease for oil and gas, then you will not be included in any well and will not receive any royalties. If you own 100% of surface and minerals in a small tract and have a clause preventing use of the surface in your lease to A, then (1) if A is the operator then it will be bound to the clause and (2) if B is the operator, then A may be prevented from participating in the well if B insists that the tract only be included if it is used in part or in whole for a well and you will be left out of royalties. If you own 100% of surface and only a fraction of the minerals and have a no-use clause with A and the other mineral owners lease with B and B is the operator, then A will not necessarily have any ability to control the well site and you may have to prove your damages for use by the dominant mineral interests. There are endless fact situations which can affect the outcome and no single answer applies to all circumstances. As with most things, the answer is “it depends”.
I agree with you on this and that was my thoughts also. I wanted a good opinion and you gave it to me. Thank you!
