When should drilling start

I leased the mineral rights to my land a year ago and keep receiving more offers, I wonder when drilling will begin . I have some one wanting to lease the surface for a yard as well. Hope to see the good times roll in,LOL

Donny:

Several factors enter the picture when talking about the exact timeline for drilling. First, the lessee may want to wait and watch the activity in the immediate leased area and evaluate the productivity of any new wells. Second, the term of the lease, a lot of operators schedule drilling based on lease expiration dates. In my opinion, this is why I would not sign a lease for more than 3 years. Another factor could be the rig availability. Perhaps the operator has two dedicated rigs but can't get to your area as they will opt to utilize these rigs to drill leases nearing expiration. One of the most important things you can do as a mineral owner is to keep abreast of the activity in your leased area as this will have a major factor in your lease being drilled.

ok Thanks alot

Donny,

In addition to Charles' excellent posting above, I'd also suggest (if you're not already), keeping up with what your Lessee is doing through their corporate website (if they have one). You can learn much from their Investor/Analyst Presentations, webcasts, Quarterly Reports, conference presentations, etc.

Also, I've set up Google Alerts for my Lessees, so anytime they're mentioned in a press release, news article, blog, etc., I'm notified in my Inbox, with a link to the article. http://www.google.com/alerts I also have alerts for the counties where our tracts are located, as well as the term 'Cline Shale', so I can see what others are doing in the area.

Thanks to the above sources, and postings on this Forum, I now understand why our Lessees have delayed starting on our tract.

Donny,

When you lease the surface, check the terms. It most likely be for the lifetime of production in that area. It may well be leased for forever. I consider forever as my lifetime.

Tom:

Are you referring to the "surface" as the mineral area. If he leases only for the surface, say for growing crops, that is completely different than the mineral lease. If he leases the minerals in an area and a well is drilled, then the mineral area will be held by production unless of course there was a pugh clause in the lease.

Thanks Pete for putting together a timeline for us!

Pete Wrench said:

Please keep in mind that the oil-and-gas industry is one of the most complex and most regulated businesses in the country. It takes time to do all the title work, obtain all necessary permits and complete all necessary paperwork, and have the stars align sufficiently in order to actually spud the well. It can easily take 15 months to do all these things, and then could easily take another month to drill the well, another 2-4 months to complete the well, run all curative, and process and distribute the division orders and first royalty payments. This doesn't even factor in proximity to pipeline or economic factors. It could easily take 2-2.5 years to get your first royalty payment. I think the fastest I ever saw a client complete a well was 7-8 months.

Not sure about leasing the surface for the yard, my GUESS is that you could go ahead and lease it, that's it's first come, first served as to who gets to use your surface for what, but read the OGL first and check with an attorney or landman with more information than I have on this point.

Paige, that's a good idea with Google alerts, I'll have to try that! Thanks! BTW I'm sure you already know, but in case you don't you can "Google Earth" your property to see if they show something going on around you.

Thanks again!

Paige Johnston said:

Donny,

In addition to Charles' excellent posting above, I'd also suggest (if you're not already), keeping up with what your Lessee is doing through their corporate website (if they have one). You can learn much from their Investor/Analyst Presentations, webcasts, Quarterly Reports, conference presentations, etc.

Also, I've set up Google Alerts for my Lessees, so anytime they're mentioned in a press release, news article, blog, etc., I'm notified in my Inbox, with a link to the article. http://www.google.com/alerts I also have alerts for the counties where our tracts are located, as well as the term 'Cline Shale', so I can see what others are doing in the area.

Thanks to the above sources, and postings on this Forum, I now understand why our Lessees have delayed starting on our tract.

Hi Paige. It's been a while since we spoke and I know you are keeping up with what is going on in Lynn County. Is anything happening around my interests - 10 mi. N of Tahoka on hiwy 87, east side? We leased with Shell and I have heard nothing since. Is anything going on even remotely close? Contact info: mlboggus@att.net.

Thanks!

Mary Lou (Lichey) Boggus

Hi Mary Lou! Great to hear from you. I haven't heard anything more about Shell's being able to sell their leases, and I think Cal would have told me if he had an update on that. My GUESS is that since they want to sell them all as one big block of leases that their potential buyers are limited, so it's taking awhile.

Most Lynn Co. permits I've seen have either been down around O'Donnell, out west by Mound Lake, or close to Wilson and Tahoka Lake. You could look up your section on the RRCmsn.'s GIS Viewer, 'zoom out' and see if there are new permits closeby (blue hollow circles). http://gis2.rrc.state.tx.us/public/startit.htm

Good luck!


Mary Lou Boggus said:

Hi Paige. It's been a while since we spoke and I know you are keeping up with what is going on in Lynn County. Is anything happening around my interests - 10 mi. N of Tahoka on hiwy 87, east side? We leased with Shell and I have heard nothing since. Is anything going on even remotely close? Contact info: mlboggus@att.net.

Thanks!

Mary Lou (Lichey) Boggus

I would expect that IF the operator has plans to drill, they would commence doing so shortly before the lease expires.