I hesitate to interrupt a useful conversation. Has anyone heard of a Lessee oil & gas company paying or reimbursing its lessor-landowner's increase in property tax resulting from having a well on his/her land?
Robert-
No. I have seen a few leases, very few, where the company agreed to pay the mineral owners share of the severance tax, but never property tax.
Search for the well on the RRC site. When well info screen pops up, click on Drilling Permits. On that screen, click on the Unit name, and all of the plats and other filings on the unit come up.
Thank you very much, Wade!
Hello...I am looking to lease and/or buy 5-10 acres of land, preferably off a major highway or county road for the purpose of possibly obtaining a permit for a saltwater disposal well. Three (3) phase nearby would be a huge plus. Please text/call Tim Terry at 512-791-2499
Has anyone received any notice from a rig operator in Fayette County shutting down production? (due to lower oil prices?)
Scott:
I just saw your post and thought this would be a good start for today. I have no inside knowledge about production; but, IMO, it is too early in this "tug of war" for anyone to even think about cutting production. Theses operators have bills to pay. First off, the price of oil has dropped close to 30%; but, just because we got use to $100 oil doesn't mean that it has always been there. Again, IMO, and from what we read, the shale drillers will definitely tighten their belts, so they will limit or stop leasing and drilling except in what they perceive to be very productive locations; but, if they have completed a well and production is coming out of the ground, I can't imagine they will stop producing a well even if oil totally drops off the plate for awhile. Most of us that frequent this blog would love to see the price of oil come surging back; but, unless something changes here at home or the Middle East, it is very unlikely that we will see $100 oil again for a spell. It "ain't" like most of us haven't expected this to happen anyway. Just pull up an oil price chart for the past 50 or probably 100 plus years and you will see unbelievable price swings.
We also have to remember that this very expensive shale drilling isn't the only oil drilling. For sure here in Fayette County where the majority of us have limited shale thickness, the shallower and less expensive to drill and operate strata's will still be profitable, even at numbers down to much lower numbers. What that is, will depend on the individual operators; but, it ain't over yet.
WTI and even Brent prices might improve if the US crude export ban were repealed. (The ban passed during the Arab oil embargo of the 1970's). I'm old enough to remember waiting in line for scarce gasoline.) Urge everyone to write their senators and congressman to repeal the ban. China and Europe need oil, and Canada needs light oil to reduce viscosity of their tar.
Robert:
I am getting to be an old man as well, so I remember the 70's quite well; however, I also remember the gas lines following Katrina and I sure don't like them, plus I am a mineral owner with leased places and i would like to see the oil prices go back up or at least stabilize at a point somewhat higher than it is right now so these guys would drill on one or both of my places. With that said, I am still enough of a protectionist to say" leave that export ban alone" and for the opposite effect, don't approve the Keystone Pipeline either. (Wow, that will probably stir the troops). I don't like the government meddling in any of our business; but, IMO, that ban was put in for a good reason and I don't believe I see any reason to lift it right now. One thing for sure, it depends on which side of the isle we are sitting on at the moment; but, again, IMO, short term fixes only work for a very short time and usually, not for the better.
As to oil prices, I’d like to see them higher, but there is going to be continued activity by operating companies, especially in counties like Lavaca, Fayette and DeWitt that have many “sweet spots”. Companies will be cutting drilling in marginal and experimental areas. For useful information go to the link below and see what experts like R. T. Dukes and others say. For a better understanding read the whole article as I did. Bigfoot, when the government forced the oil export ban on us it was meddling in private business.
Mr. Fairey:
You are very correct. I couldn't agree with you more.
Well (sorry about the pun), the production in our lease dropped over 55% from Sep to October. I was presuming that cost recovery for the well has been reached (about $8MM) and it is becoming more beneficial to keep the product in the ground ; for now. Thanks everyone for your insightful replies.
The odds that operator is choking back production to "keep the product in the ground" is pretty unlikely IMO. What you are probably seeing is some sort of mechanical and/or reservoir situation that is negatively impacting production. Question now is if operator can correct the problem or install efficient artificial lift to get production back up.
Does anyone have any info on what is the going rate on oil pipelines are getting. We were offered $15 a foot but I know that is just the standard low ball offer in the beginning. I have heard some agreements of around $45 a foot. This agreement will be with Republic Midstream in Lavaca County just north of Moulton.
Any feedback is appreciated.
It's usually so much per rod and the greater the diameter the higher the rate. A well drawn lease usually sets the rates.
BigD:
As with any lease, it "depends"! I personally only know of one new line in our area and part of it was an existing line. Had to add new "tie-in" lines on each end to support flow from wells. The new line on each end is a low pressure 6 inch (<100psi) polyethylene. One line only, with no additional lines or size upgrades. Some negotiated a 50' Permanent with a 20 foot temporary and others with a 30 foot permanent and a 20 foot temporary. In each case, there was an 18 month use or "in-service" clause to hold the line as Permanent. As you indicated, the initial offer was $15 and went to $20 very easily and I have heard that most got $25 and some $30. Of course as I said in the beginning, "Depends". These are lines to support wells and are low pressure and one and only one line. At least IMO, bigger, higher pressure and other particulars definitely should change the dollar number. Also, the word Permanent raises the hair on the back of my head, so that might be a strong consideration for negotiations.
Good luck that's a total drain from my neck of the woods.
If you are talking about a line your lessee is installing, I got $300 per rod for a 4 inch diameter gas pipeline running from a well site the lessee company ran from my well location to a central gas processing facility, as required by my lease the lessee agreed to. The lease would require more for a 6 or 8 inch diameter line., And require burying pipe 2 or 3 feet below surface, with "double ditching" to separate top soil for cover. An experienced oil and gas lawyer could help protect your land and get a fair price. If your talking about a long transmission line that might have right to condemn, there is an Austin lawyer who is an expert in negotiating those. His name is McFarland. Google "McFarland Austin lawyer".
This is a transmission line that is heading just south of shiner. There will also be a tie in line that connects on my property. There is a 30 ft easement with a 40 ft work easement and it is for one line now with an option for a second line at some point in the future.
BigD:
Transmission line sounds to me like the possible "right of eminent domain" if they so desire to use it; but, there still should be some decent reasoning. I'm sure no expert here; but, have spent quite a bit of time researching and reading about ROW's over the years. Fortunately, I never had to deal with a true transmission line before, so the "big stick" of Right of Eminent Domain was never an issue. If it is truly an Transmission line, I would suspect that you are dealing with rather large steel lines under rather high pressures. IMO, it shouldn't come cheap for even one line and possibly double or close to that for two. Not that you don't already know it; but, this sucker is going to be a stumbling block for many generations to come. A good lease and IMO, an expert negotiator and ROW lease builder is imperative. It may cost a few extra bucks up front but, again IMHO, it will be worth it. Back last fall when I thought I was going to have to deal with a new pipeline, I called what I, as well as many others consider to be an expert and even though he doesn't work many cases at a time, he said he was willing to take on a few projects. Most local attorney's already have a generic pipeline ROW pretty much prepared and do a fair job of negotiating; but, since they try to get along with everyone, on both sides of the fence you will get what you pay for.
Good Luck!
Just and FYI,
They did include that eminent domain document in with the the agreement so I assume that is a possibility if they choose to do so..