They're gonna drill on section lines, then they can access the two sections at once. Ideally they want an intersection or corner of a section line so they can drill all four sections at once, as they can drill one in a week or two, move 20-30 feet, drill the next section, then move again, etc.
basically, unless you're on a section line, you're not gonna "see" a rig. If you haven't been included, they may not have "won" your section (by having the majority of leases) and are either in negotiations with the company that did. . .or the other company will be buying CHK out of their interest and the other company will be applying for the section. . -just my 2 cents
As I understand the spacing order, they requested 1 well per 640 sec. but they still have to folloe existing spacing of 600ft. from boundaries( in this case 640ac) AND 1200ft from another producing OR drilling well. Im on a hill par to the surrounding sections but it goes down to Running Creek towards the west. The only other piont is that 1 owner(40acre) has held out from signing lease and is "rather" opposed to the drilling and production process. Also half of our section did "very well" compared to the rest of the surrounding sections because we did not jump right in. Does any of this make any difference? Don't mean to 'beat-a-dead-poney' so to speak. Trying to figure out Chesapeakes intentions may be just that.
Don, holdouts of leasing in sections don't make much difference unless there is a majority of holdouts. In most of the sections CHK operated in, they are the majority lease holder. When and if they decide to space your section and have plans to produce it, CHK will try to lease the holdouts (per COGCC regulation) and if they still holdout, they will be force pooled and become a working interest in the well when the costs are paid for their share. As for the lessors that "did very well", the only consideration CHK may have for them is to not sell to China as soon as others they paid less for. Most of the leases they paid $250 or 500 an acre for have been sold to China in Elbert Co. Also, if those leases have provisions where CHK is responsible for something that costs them money, that may cause them to wait until they know if production will be good in the area.
All that said, who can know what CHK's motives are? You can only speculate. A lot of what they do is for Wall Street purposes only.
Oh, I'm not "holding out". .they tried to screw me on my mineral rights, I'm waiting for them to offer me the 100% they paid to neighbors on either side of me that purchased their property in the same parcel I did. They will have to make the offer as outlined in the COGCC prior to force pooling.
As I understand the involvement of China in funding CHK, they are merely an investor and are not actually "sold" to them. China was actually investing, not making direct purchases. CHK asked for a loan.
I don't expect that "holdouts" are effecting the sections, but there are people that signed with other companies (Conoco, etc) and those are the ones that effect their ability to apply for the spacing orders, etc in a section. Competing companies will need to have their interests met/ compensated before COGCC will approve the section.
CHK is gonna want to find the "sweet spot" in our border area of the DJ area of Niobrara. Holes up near the WY border had 1700 barrels and 368,000 cu ft of gas in 24 hrs.
The rigs can go 8-10,000 ft down in 4-5 days and then go out 20 to 26,000 feet from there in another 7-10 days. . CHK is getting around 300 barrels a day and a TON of gas (which is what they really WANT). . In the shale, they get a bunch of oil off the bat. . then it can "trickle" for decades.
Drilling is always Geology Driven.
Sorry D Moeller, I was addressing Don Jones on his question of lease holdouts in his section. To address your comments, CHK has sold the leases they got for $250 to $500 an acre in Elbert Co. to the Chinese National offshore oil company. That company has an agreement with CHK in learning how to drill horizontally. In the Eagle Ford, northern Niobrara and Powder River Basin, CHK sold 1/3 their leaseholds to China for the purpose of creating cash flow. If you look in the Elbert Co. Clerk and Recorder's website under Assignments, you will see many leases already sold to China by CHK. Yes, it is a way for CHK to make money, but the fact remains that China now owns those leases for the term of the lease. For the Eagle Ford play, there was an article that stated the Chinese company would have CHK drill for them for the purpose of their education on horizontal drilling, but they own the leases.
Any company that holds leases in a section can apply for a spacing unit, no restrictions from COGCC. All mineral owners (including other oil companies that hold leases in the area) are listed on the spacing application as being notified of the spacing being applied for. Those companies then have the opportunity to engage in a partnership with the applying company or if an agreement cannot be made, they sell their leases or they are force pooled just the same as a land/mineral owner. They may negotiate between themselves prior to applying, but not required by COGCC. COGCC requires any formal protests be resolved however. There is also no set percentage of lands leased required by COGCC before applying for spacing or force pooling. Thom Kerr at COGCC has always been happy to address any questions anyone may have on the permitting process.
That was new info to me, that is why I'm here, to learn and share. . thanks !
CHK has left Elbert chasing fish in OH and NY and PENN, New Dog going to drill mid to late summer you watch, or watch and learn.
So, did Elbert Co's delays and/or restrictions cause CHK to stall. . or do we know?
I know that CHK is pretty active up in Converse County up in WY too.
Most the leases were 3 years and signed in 2009 and 2010. Elbert is so far behind they are lost. I am not sure who will drill the first hole but it will be this late summer. CHK is divesting thousands upon thousand of acres Non producing and HBP from Wyoming down to New Mexico.
Two points to wonder about. The leases I have seen prior to Jan. 2011 when I signed were virtually all 5yr. terms. We were some of the first to hammer out 3 yr leases. Not pats on the back just what I observed. The other point I could not verify was the assignments fro Chesapeake to China from on Elbert website or from Recorders office personally. Where is this info escaping me?
Thanks
Another issue just came yesterday in the mail all around us. We received a request to "permit to conduct geophysical survey' from Geokinetics. The permit is very short and very vague and cheap. Has no provision for ANY damages they may cause, no term limit, and they only want to pay if they lay cable which means they can come onto property to survey. We own land and minerals by the way and there was no provision in the lease to survey. Is Geokinetics in cahoots with Chesapeake?
Thanks again,Don
I have yet to sign the request that I received from Geokinetics. if anyone has any ideas or suggestions on whether this is a good idea or not, I would love to her it. all feedback is welcomed. My property is off of CR 50(Arapahoe County side) about 5 miles east of Sun Country Meadows.
If you look at the map were the study is being conducted it covers about 66 sections and I believe genetics is being paid by multiple clients of which one is CHK and Anadarko. All your doing is allowing them to lay cable or sensors so I don’t think its a big deal unless your opposed to drilling in Elbert. The study goes all the way into 2 million dollar houses in th Timbers.
Don Jones-For the sale of leases to China, go to the Elbert Co. Clerk and Recorders website and search on "Assignments". You can specify what Township, Range, Section in the Advanced portion (just input numbers there, not South or West). Sometimes they have put them under "All Assignments" and others are under Assignments of leases. You can put in a date range also to lessen the number of hits, but there are not that many. Most of CHKs assignments include many on one recorded assignment. And you are right, most of the CHK leases were for 5 years.
The Geokinetics seismic includes way more than 66 sections. It includes a portion of T 4, all of 5 and 6 and a portion of 7, Ranges 63, 64, 65, and a portion of 66. They were hired by multiple company's to do it. The company names are a secret according to COGCC, but would expect at least CHK to be involved. If you have been contacted and have a lease that has seismic provisions in it, you need to make them aware of that. If you don't have seismic provisions in your lease, I believe they have to have your permission to come on your land. I don't know if they do if they stay on the roads. I've heard it is not that damaging (only what I have heard, so don't take my word for it), and depends on how close they get to water wells.
Debbie i was talking about the sections just approved on Dec 15th.
Good Article Kevin. I have a freind that did some LM work for CHK in OH and they have been pulling the same over there :(
Jason-I haven't seen a project approved on Dec. 15th yet. The "Delbert 3D" project (the one I was referring to) was approved on Dec. 6th. Another 3D shoot overlaps that one to the north in Arapahoe and Adams county also.
I think they did and add on and pushed a few sections south of 7,8,10,12 I see they are in Adams and Arapahoe as well and all that combined is about 400 Square miles so about $18M for this study, WOW!!!! ($45K per square mile estimated)