I have received a production sharing agreement from Devon for a gas unit in Parker County. This allows for addidional horizontal wells to be drilled across the same acreage, and provides for splitting the production according to a formula based on the amount of lateral under the given unit. Has anyone else seen this type of agreement. Any issues?
Seems to me the good thing is that it allows for additional wells and additional recovery.
This means the lease is held longer by production, and more $ are generated.
The bad thing is that it does not improve on the existing royalty interest nor does it provide any lease bonus.
I guess this is a good compromise, but wanted to see what others have done or experienced.
I inherited fractional % of 2 producing gas wells in Parker County that are working interest. Everything else I have is royalty interest. However, I just received a Fed Ex from Devon, wanting to re-drill horizontal wells at a cost of $3,500,000 each. Wondering what production is like on re-drilled wells in Parker County.
I have two wells in Parker County with Devon, would of course like to see more production in that area. DH above, Lease bonuses are only paid when your land is first least. After production starts, you only hope you have a great Energy company like Devon that keeps the current wells and drills new wells along the way to increase production. My Family has done business with Devon in the Past, and I see them as a Great Partner. But of course we would also like to see Natural Gas Prices double too.
I have finished my deal with Devon, and they told me they are planning on drilling 2 horizontal wells in 2014, which includes the Lavendar Gas Unit, where my interest is.
I will look forward to having the same with Devon, they have been a good Partner, Honest and pay is good, while no lease bonus, you really want more from the hole. We have two wells on 139 acres, and so more would be a good thing, This tough winter the North East is having hopefully will drive Natural Gas prices up.