Does anyone know the status or potential valuation of the Chaparral proposal? I have production in the unit area that has generated good revenue for many years so how does one know if the royalty value will be enhanced by unitizing? Does unitizing increase the royalties or increase the life of the production (or both)?
Archie, I’m afraid I have very bad news. The Chaparral Unit proposal is for most royalty owners who have had production a devastating blow. For those who have interests in non producing sections (out of a total of almost 3300 acres proposed) they MAY see some production in 5 years. I am intimately involved with this matter and there’s a lot of information you need to know. If you have signed and returned an approval for the unit to Chaparral you can technically revoke it with the OCC, but the OCC will be deciding the matter within a month or so in ongoing litigation. If you want correspondence about this matter I’d be glad to give you extensive information. I personally stand to lose virtually all my royalty income to Chaparral’s action. Not sure how to correspond with individuals on this forum, but if you reply maybe with your email address I can answer back immediate. I repeat with all gravity, this is an imminent and extremely serious matter.
Jake -- I have not signed up and YOU GOT MY ATTENTION!! I will appreciate your providing or giving links to all information that will give light to Chaparral's proposal. My email is [email protected].
My interest is in track 28. I do not claim any knowledge of the geology or how the Burbank unit has been formed but I distinctly feel that my central location will cause the underlying minerals in my tract to be diluted by the lower valued surrounding acreage. Horizontal drilling and fracking techniques would yield more individual benefit. I know of producing OK wells that are being either re-entered or re-drilled to enhance value.
Jake Lewis said:
Archie, I'm afraid I have very bad news. The Chaparral Unit proposal is for most royalty owners who have had production a devastating blow. For those who have interests in non producing sections (out of a total of almost 3300 acres proposed) they MAY see some production in 5 years. I am intimately involved with this matter and there's a lot of information you need to know. If you have signed and returned an approval for the unit to Chaparral you can technically revoke it with the OCC, but the OCC will be deciding the matter within a month or so in ongoing litigation. If you want correspondence about this matter I'd be glad to give you extensive information. I personally stand to lose virtually all my royalty income to Chaparral's action. Not sure how to correspond with individuals on this forum, but if you reply maybe with your email address I can answer back immediate. I repeat with all gravity, this is an imminent and extremely serious matter.
Others may be able to use information that I have generated regarding the proposed unitization proposal by Chaparral in Kay Co -- First, the information flow has not been as good as it should be, but my assessment of "the deal" is as follows. (1) if one is a working interest owner in the proposed area, they can expect considerable time in the red since they have to write checks to the unit operator for their share of the unit's start up costs. If Chaparral cannot or will not purchase all working interests they do not already own, or if the offers to buy are not satisfactory to the working interest owners, (Hallco appears to be one) they will have periods of substantial negative cash flow. (2) if one is a mineral interest owner of a producing well in the unit, they will have no expense and I think probably over time a gain in their share's value. I am going to support the unitizing for several reasons. One is that Chaparral has the financial where with all to drill the additional wells that are required. Another is that secondary recovery in the block immediately to the east (in Osage Co owned by the Osage Indians) is being successfully implemented and operated by Chaparral. I see a lot of future upside with a more gradual production decline that will be enjoyed by every mineral interest owner.