Any info on garvin county 34 33 1N 1W? Thank you
Continental filed a motion to extend the time to commence drilling of the well under the pooling covering Section 34. That indicates they need/want more time for some reason. They appear to still be buying leases in the vicinity. If you are getting offers to buy your minerals, that is a good sign.
Why would Casillas Petroleum Resource Partners II, LLC want to re-space an 80 acre spacing and a 40 acre spacing to be deleted and replaced with a 640 acre horizontal spacing in Section 32, 1N, 3W in Garvin County? What is the genesis of this respacing request and what is the advantage and to whom?
Horizontal wells need more space as they run parallel with the surface while vertical wells take up very little surface space and can go as deep as the geology and technology allows. The advantage is that shale formations generally run horizontally and the wells will be more productive than vertically drilled wells. Every royalty owner will share in the proceeds no matter where in the 640 their acreage is located.
Thank you so much for explaining that. Your answer implies that it is a financially positive action. But I just wondered why a company, Casillas Petroleum, would be motivated to go through the legal steps to accomplish the re-spacing. They must obtain a profit from someone who hired them or from the re-spacing itself???
No, the profit comes from drilling horizontal wells, the type formation that is being drilled in that part is called a shale play and the only way to fully exploit it is to drill horizontally which requires much more acreage than a vertical well which would not be productive in the that formation. Casillas makes money from the oil and gas they produce, as a royalty owner you make money from it too if producing oil and gas wells are the result. If the spacing remained 40 or 80 acres no one would make any money. It’s a win win, no ulterior motive.
In many sections, the original spacings were for vertical wells that had a fairly limited drainage area based upon pressure and fluid type, depth, etc. The new horizontal wells have vastly different drainage patterns, (more like the shape of a cigar) and need the larger spacing rules to effectively drain a section and protect from draining the sections that are contiguous. Perfectly normal process, so do not be concerned.
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