Hutch, can you tell me on multi-unit wells if production is commingled or is it reported and paid out on each individual well? Thank you.
Jeanie, they just treat it as one well but before it is drilled an estimate is made on the allocation for each section. If the length of the production intervals are the same in each section then it's 50/50 but could be 60/40 or so on. The permanent allocation is done after the well is completed. If it's not 50/50 then some people will feel shortchanged. But on the other hand if not for that short portion there might be no production in that section at all. In one case I know of a section has 5 laterals coming in from the north and 5 from the south and they are getting 30% of 10 wells.
Hutch. Wow. Ten wells! Holey moley!
PS Anything brewing in Sec 27 8N 6W?
Jim, seems like this came up before, Continental's Brannan 1-34-27XH multi-unit in 8N/6W. All orders approved but no Drilling Permit yet.
Hutch: You are right, but I was hoping something had changed. BTW, thanks for all your efforts in keeping us informed.
Jim
Does anyone know why a drilling company would abandon the election to drill multi-unit wells and decide instead to drill infill wells?
Could be that they don't have enough acreage in the unit next door and haven't worked out a deal with the other company(s) yet. Could be that they don't have the next door one leased at all. Could be that the geology is better in the single unit than the multi. Could be that they want to run a test on how many wells to drill to infill and the timing is right to do it in one section versus a long well. Could be that the rig they have isn't capable of drilling the long reach well. (I don't know what kind of rigs they are using here and if that is an issue. I know it is offshore with the really long wells we drilled. Had to have a strong enough top drive to drill those really long wells.) Availability of frac crews, pipeline hookups, tanks, etc. Many possible reasons.
There are many reasons to change strategies! Thank you M Barnes for insight into this complicated process.
The Hatcher 1-35 with an irregular spacing holding the W2 of 34 and the E2 of 35, could be part of the reason.
Rick, I think back in 2008/9/10 Cimarex respaced them, I know they leased they acerage from zephyr.
One of my clients got a lease offer in Sec. 26 3N 6W for 3/16 and $500 an acre. Does anyone know if this is part of the scoop or if that is a fair offer for that area in Grady county?
If that is the first offer, it probably will go a bit higher. I heard $600 3/16 in s 24 catty corner. It may be on the edge of the gas for the SCOOP, so those are not going for as high as the condensate zone.
anyone have any dealings with freedom oil and gas? Is it a legit company?
Thank You M Barnes. Richard, what is the exact name of Freedom Oil, LLC, Inc., etc. and what city are they out of? There are several companies with that name.
I have just joined and need help with the land company wanting to lease. It is located on Section 7, Township 11N, Range 5W in Canadian County. they are asking $400. a acre plus a 2 year option and 3/16 Royalty.Is this area of interest? What should we ask? have 14.875 but as a group with family we have 59.5 net acres.
There has not been a lot of leasing in 11n-5w yet ,but there has been in 11n-6w and for a lot more money and more royalty . The terms of your lease are very important . I sent a pooling order on a section two miles from you . Look and see what they were ordered to pay there . There is a lot of good info about leases on the forum if you ask . Stephens and Grady have a bunch of good people.
Thank you for the info Ron. Are we in the Cana Woodford Shale? Should we wait for a pool?
John, I don't think you need to be in any hurry. Before a well can be drilled there is an application process the operator must go through with the OCC, pooling is usually the last item. Until you see evidence the process has started the leasing offers will stay low. I would just wait and see unless I had an immediate need for the bonus money. Don't go for the 2 year option, a lot of money could be left on the table over the next 3 years.
John...You can ask for more bonus but don't give them any option~2 yr. or other wise. That would just allow them to put you on the back burner for drilling and who knows what your royalty will be worth in 3 yrs. if drilling keeps increasing like CR and Newfield are talking about. With that much royalty among your family you should have a little leverage. I would talk to Apache, Newfield and Continental to see if they might be interested before signing anything. The land people for them have been listed on the Stephens Co. and Grady Co. forums several times a week or so back, i think. Best Wishes