I was notified through Enverus that a new permit was approved to drill 4 new rigs in proximity to my current interest. One of those four has been spudded. Since I’m new to this, when do the operators of the wells have to notify you of these wells? What is process of receiving any royalties from the new rigs? Would I need to sign a new lease agreement for the new rigs? The county is Reeves, Tx. Operator is Apache(Callon).
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They are not drilling four new “rigs”, they are drilling possibly four new wells with one drilling rig. They do not have to notify you as the data is public. If they are “near” to your current interest then they may or may not affect you at all. Your mineral interests must lie within the spacing unit for the drainage of the wells into order to receive royalties. You would have already been contacted for a lease for the wells if they pertain to your interest. If you post your abstract number and names of the new wells, someone on the forum can help you further.
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You will not be notified unless your lease has a provision for that.
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Forgive me as I’m very new at this and terminology. When I look at Enverus, it says Permit-new drill approved on 3 wells. Poutine Unit 57-330W 10UA, Poutine Unit 57-330E 3LA & 11UA. Also, under Rig activity it says Poutine Unit 57-330W 17H has been spudded. We are already receiving royalties for Poutine Unit 57-330W 2H, Poutine Unit 57-330E 9H & 10H. The abstract is 472 Block 13 section 57
This is all recently inherited so I’m unsure of what the current lease agreement says, just figured if these new wells/rigs were nearby and basically same names on same property then the operator would notify of any new interest due or ask for new lease authorization. I understand interest wouldn’t be due until the ‘new’ wells/rigs were completed and producing.
I’ll help you with nomenclature. A drilling rig drills the “well”. Then the drilling rig leaves the location. Then a completion rig comes in for the completion phase and then leaves. What you have left is a well. So “rigs” or temporary whereas “wells” may be there for decades. Most likely, the original lease is still effective by virtue of production. Any wells drilled that cover a part of the leased acreage you will have a part of. It generally takes 6-10 months from time drilling starts to the first revenue checks for each well drilled. Hope this helps.
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If you haven’t seen them the plats of the Callon Politine 57-330 East and West Units that are below might help you understand some of the things M_Barnes and Todd mentioned. Those plats were included in the permit application Callon filed with the Railroad Commission requesting approval to drill the new wells you saw on Enverus.
On each plat the blue dashed lines show the boundaries of the unit. Each of those units includes a total of 640 acres and each one covers half of Section 57 and half of Section 330 that joins Sec. 57 on the south.
If you are currently receiving royalties from the existing wells in each of those units it looks like you should also be in line to receive future royalties from any wells that are completed within the boundaries of either of those units.
The plat of the West unit that’s below shows the path of horizontal leg of existing Well 2H, you said you are receiving royalties from, and also shows the proposed paths of Well 17H and Well 10UA that Callon has permits to drill.
The plat of the East unit shows the horizontal path of existing Wells 9H and 10H and the proposed path for Well 11UA. The proposed path for Well 3LA is on a separate plat that shows that horizontal leg running parallel and about 300 feet west of the 11UA.
The monthly production reports on the Railroad Commission’s site show that production from the wells in each of those units is combined in a single lease. Since everything should be covered by your existing lease and the division orders signed when the first well in each of those units went into production you may just notice increase in your royalties as new wells are completed in those units rather than getting any kind of notification.
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Super good info thanks
Thank you for this. Good information for sure. Maybe you can explain to me one other part. Callon told me we had no owner interest in 330-57W 1H. I don’t understand the why? if we have owner interest in 2H. We also have interest in Skyfall and GoldFinger that are in the next plat over, section 330. Its very confusing to me. Should I ask for the original lease terms?
I’d wondered why you didn’t mentioned the 330-57W 1H in your earlier post.
RRC shows the status of the 1H as “producing”, but you can’t tell from the production report covering Lease #53719 how much the 1H is contributing to the total production of the unit.
If it’s producing I expect you are getting royalties from it. Are you saying you’re not because it’s not shown on the statement you get from Callon with your monthly check?
Try emailing your question to their Owner Relations group.
Yes, I talked with owner relations about this. They said 1H & 2H are reported together to RRC but I am only getting royalties from 2H because I don’t have an interest in 1H. They didn’t give me a reason as to why that is. My statement only list 2H.
Look at your deed. If your minerals are in Section 330, Block 13, then you will only be paid on the wells with horizontal wellbores that go into that section. The Poutine 2H is a two-mile lateral in Section 57 and Section 330. The Poutine 1H well is a one-mile lateral only in Section 57, Block 13. You will not be paid on the 1H well if you only own in Section 330.
Thanks, this is making more sense to me. I need to find the lease agreement and the deed.