The ramp up in drilling in the Cline has been much slower than the Eagle Ford, which appears to be due to the fact the results have been inconsistant. It seems like it will take them some time to figure out the science on the Cline, which means the longer time frames are in order.
The Eagle Ford oil wells have been very consistent in the 300-1000 Barrel/day range initial 30 day rates. The few Cline results so far, that I have seen, are more variable, with some well below 300 barrels. I just think it will take 3+ years to figure out the science so they can get more consistent results. Also, these companies have a big inventory of Permian Basin and Eagle Ford locations to drill that are more proven, and the tendency is to drill the surest locations first, to help cash flow.
This does not mean the Cline is not the real deal, but if it were as great as the Eagle Ford or the Bakken, I would have expected to see a rapid build in rig count, and it has been a pretty slow build so far.
The other factor that gives me some concern are the companies that have trumpeted the Cline the loudest tend to be the ones that already have large land positions locked up, such as Devon. They may be hyping the play to draw investors and capital, as evidenced by the Chinese investment deal Devon pulled off.
Living in San Antonio, the Eagle Ford went from a few whispers to a full on boom in 2 years. I have not seen the Cline follow the same path, yet. Keep in mind, though, that Devon did not make their big announcement about the Cline until February or March of this year.
What inconsistencies are there and do you mean more like the 3-5 year time frame?
That’s some bad news. Which Cline results are you referring to?
Rig shortage is certainly a factor, although the Permian rig count has slipped from about 420 to 390 in the last 4+ weeks.
I was referring to results in some surrounding counties in the Cline. Saw some below 100 barrels. Devon is saying they are averaging 300+ on their wells. You can look at the completion reports in the Abilene and Midland papers online, and a few have been reported. Some are in the Strawn formation.
George, it looks like your section 63 touches corners with section 71 where the Webb is located. 63’s SE corner touches 71’s NW corner. The well is in the SE corner of 71 and the horizontal drilling headed north.
All that’s in block 25 for those who like to keep up with it.
It was a good day to read posts on here with many interesting comments.
You need to take into account for the slow movement into the cline shale the shortage of rigs and works. There are all of a sudden at least 6 major shale plays competing. Just saw a news clip about shortage of housing in midland area and very high rent prices due to ramp up of drilling. You can bet that if it is leased they will come in and drill at least a vertical on you just to hold the lease. They did this in the barnett, drill one well then jump to the next and come back later to fill it in. So I say if it is any good at all you can count on a well before your lease is up or if you have an extension they might do that if it is cheap enough.
Update on the Firewheel well on the Webb lease south of Loraine: Frac’ing (gee, I really don’t know how to spell that word, have seen it so many different ways) started today. Take about a week, at least 30 stages. Roustabout gang still building the tank battery. Plans to build a cold skid to knock product out of the gas. Bill said there was a flurry of activity, lots of men working.
In which Section is the Webb lease? My interests, sections 58, 63, and 64, are about 2 miles south of Lorraine.
Is Firewheel Energy, LLC active anywhere in west Texas? Do you know anything about their performance or business reputation?
Firewheel Energy, LLC - know anything about this company - are they active in west Texas? Mitchell or Nolan counties?
How about their business reputation? How can I get an evaluation of this company? thanks!
Robert, you are so nice to take time to provide helpful comments - thank you! I’m encouraged, because my family just signed a lease with them.
Hi Ferrell. My understanding is that Firewheel is a newer company that was started from several of the owners of another major oil company(whose name currently escapes me, maybe XTO?) who sold the other company they started and made lots of money. With some of this money they started Firewheel last year I believe. I do not know if they have drilled any wells under the Firewheel name, butthey where very successful oil men with their last company. They have been active in leasing land in Mitchell Co and I almost signed with them until I had a better offer. I do not know how you can get an evaluation of them, but some of the folks on here are extremely knowledgable and I’m ure will chime in soon and give you some better info that I have. I do believe they are legit and I would not have a problem leasing to them if this is one of your concerns. Happy Thanksgiving and best of luck to you!
New drilling permit today for Devon on the Snyder Lease, 20 miles W of Colorado City, (on the west county line) for a horizontal well, 9,000 ft. Section 25 Block 30, Township 1 South
My wife has non participating royalty interests in Scurry and Nolan counties, what determines her % of royalty? She also has mineral interest in Mitchell county, but the lease agreements spell of it out.
Aaron the amount of royalty you recieve is most likely spelled out in the royalty deed or deed reservation in which she aquired her royalty. Such as the deed saying she reserved a 1/2 of the ususal 1/8 royalty, this would give her a 1/16th royalty or 6.25% royalty. No nogotiations to be done and probly no contact with her until minerals are producing and division orders are sent to her.
I do know that firewheel does have a rig up and drilling south of Loraine on CR 418, and I think maybe a couple more they are going to start
Good work, Toni.
Mickie, so if it says an “undivided non-participating 3/32 royalty interest”, she has 3/32? Using your example, the “1/2 of the usual” is replaced with “undivided”. Thanks for your explanation. Right now it is 3/32 of nothing, but there are wells in the section next to her’s in Nolan county.
We recently leased south of Colorado City for $700/acre and 20% royalty. Leased to KEW Drilling out of Dallas. Very pleasant folks to work with, and they did what they said they would, when they said they would. They were willing to negotiate on lease terms.