When sending in an AFE and your election to participate,
what is meant when the oil company also asks you to send in the “well
requirements?” Thanks
That’s your directive as to what/when/how information you receive from the well operator, re: Notice of Spud, Daily Drilling-Mudlogger Reports, DST’s, cores, logs, etc. and all regulatory filings, etc. Geez, I’d be carefull about participation in a well you don’t know much about … or are you being “carried w/back-in after payout”? Still, if you own 5 acres in a 640 ac. $8MM well that could be 5/640 x $62,500 up front for your part to drill or you’d be paying 5/640th of the operating costs afterwards and that could be a nightmare … what would be 5/640ths of the BP blow-out costs? Unless its a really secure drilling venture, I’d be more inclined to negotiate a 25-30% royalty rather than participation/back-in. Good luck.
Does the operating company normally provide you with the well requirement? Thanks for your input. Sincerely, Phil
Rocky Arrell said:
That’s your directive as to what/when/how information you receive from the well operator, re: Notice of Spud, Daily Drilling-Mudlogger Reports, DST’s, cores, logs, etc. and all regulatory filings, etc. Geez, I’d be carefull about participation in a well you don’t know much about … or are you being “carried w/back-in after payout”? Still, if you own 5 acres in a 640 ac. $8MM well that could be 5/640 x $62,500 up front for your part to drill or you’d be paying 5/640th of the operating costs afterwards and that could be a nightmare … what would be 5/640ths of the BP blow-out costs? Unless its a really secure drilling venture, I’d be more inclined to negotiate a 25-30% royalty rather than participation/back-in. Good luck.
YES, but you’ve got to ask/require and give them directives as to your phone/fax/email, etc.