We have a120 acre lease and are receiving royalties on only 20 acres as part of a one pooled unit. There are units(wells) on two sides of the property. How do you know if the product being taken stops at the pooled areas.
CK
Not trying to be cute, but seems like the Man behind the curtain only knows (Oz). Oil Compay only other answer I have heard is THE GEOLIGIST can determine. Who is, Where are, With What? I don't know. To see the answer you must have it in the Lease!
Mr. McElveen, I hear you and my not cute answer after putting in some study is that if you have wells nearby, you are probably suffering some loss, if not a great deal of production possibly in general lowering of field pressure. I think the geologist "could" know through microseismic testing from how far away a well is drawing production, the thing is that would cost money and is unnecessary to the operator because of the rule of capture, so it's unlikely to be done. They don't spend money they don't have to. I only know that the microseismic testing can be done because I read about it being done in ND to determine how well 1 well would drain a particular spacing. To me the lowering of pressure in an area is as bad as the removal of oil because if there is low natural pressure the initial production will be low, the well will not recover a large portion of it's cost quickly so an operator would be less likely to drill a well. You could be suffering some drainage, or loss of pressure which I think is about as bad. The remedy if you think you are being drained is to get your own well. If all the wells around you are under the same operator and they own the production from all of them, they don't care where the production comes from or who they pay the royalty to, so they may not be interested in drilling another well. I don't think there is anything you can do. The lessee is supposed to protect you from drainage but if the drainage is into the lessees other wells, good luck with that. If you spent alot of money and proved you were being drained, sued your lessee, I think you could possibly get paid for a small portion of the lost minerals but I think the wells would be dry and gone before you recovered what you spent. It's not good news but it's the best understanding that I have. I wouldn't assume that the operator knows where the oil comes from, because as I said, it's unnecessary for them to know, would cost money for them to find out and they don't spend a dollar they don't think they have to. That testing they did in ND was to see how little they could spend or how much they would leave in the ground, it wasn't idle curiosity, they spent some money to figure out how to make the most money and they are not doing it for every spacing.
I have to assume that the offsetting wells to your property are at least 463' off of your lease line (as per Tx RRC regulations). Early in the Eagle Ford play, horizontals were spacing about 1000' apart thereby allowing for "drainage" of 500' to either side of the horizontal. Subsequent microseismic work in the area by several operators has caused them to reduce the spacing between horizontals by more than half in some cases (or less than 500' apart).
The previous comments about reducing pressure are appropriate, but in a reservoir as tite as the Eagle Ford, unless you actually frac the formation, you will not drain any O&G and/or reduce formation pressures. just not enough natural permeability to move the O&G out of the rock.
Without knowing the actual orientation and layout of your acreage vs. the offsetting wells, it is impossible to make any more informed comments on offset issues. However, I would estimate that very very very little O&G (if any) is being taken from your unpooled acreage by the offsetting wells.
Thanks for the responses. The unit on one side is not the company that has a lease with us but the company that is on the other side does have a lease. So if they have a lease for the entire 120 acres and are only coming in on the 20 acres from the side does that include the 463' at the end of there well lines. If I am understanding the what "offsetting wells to your property are at least 463' off of your lease" is.
Thanks CK
I really can't answer this question without having a better idea of the overall layout of the acreage and wells/horizonals here.
Which well is tied to the 20 acres? Once I know this, I can look it up on Tx RRC site and give you a more educated opinion.
Shannon said:
Thanks for the responses. The unit on one side is not the company that has a lease with us but the company that is on the other side does have a lease. So if they have a lease for the entire 120 acres and are only coming in on the 20 acres from the side does that include the 463' at the end of there well lines. If I am understanding the what "offsetting wells to your property are at least 463' off of your lease" is.
Thanks CK
It is the Forister Janysek
Found three producing "Janysek" wells in Karnes County - who is the operator?
Burlington or Plains?
Thanks
Not sure, its with Marathon Oil
DO NAME Forister Janysek Unit 1H
OK - will get back to you once I look at this closer
I found the Marathon well / attached the permit which has the plat on page 3. I believe that your lease is "3" on the west side of the County Road.
Looks like the horizontal wellbore is 330' east of the County Road and western edge of the unit NOT tied to your acreage. Figure they must have gotten an offset reduction permission (Rule 38") to have the horizontal less than 463' from the lease line (unless field rules for the Eagle Ford here only dictate 330' offsets).
I am curious why Marathon included your 20 acre sliver in this unit - as you can see, it creates a "jut out" to the west that really isn't needed.
Perhaps this was done to hold your entire acreage block (120 acres) by production? Or make it "HBP". This HBP situation would continue until original lease expires.
Based on the layout of wells here, I think that Marathon will be in evenutally to drill another well both to the east of the Marathon well in the unit (i.e. a second unit well which you would receive revenues on) plus a well that will include the balance of your lease (100 acres). They may have to work with other operators who have leases inthe area (e.g. Plains to the west) to put this new unit together.
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2701-MarthonJanysek.pdf (322 KB)Which well is tied to the 20 acres? Once I know this, I can look it up on Tx RRC site and give you a more educated opinion.
Shannon said:
Thanks for the responses. The unit on one side is not the company that has a lease with us but the company that is on the other side does have a lease. So if they have a lease for the entire 120 acres and are only coming in on the 20 acres from the side does that include the 463' at the end of there well lines. If I am understanding the what "offsetting wells to your property are at least 463' off of your lease" is.
Thanks CK
Wow, I am glad you know your stuff. Thank you so much for sharing your knowledge.
CK