Could someone explain to me what this is about?! Many, Many sections are included and 6383 mineral owners are listed. It appears to me, that they are proposing extracting oil/gas in the Springer formation, using natural gas to pressurized the formation to remove the oil and gas., using existing wells to pressurized the formation and in some cases using natural gas from the wells for the pressurizing gas. Any idea how this will affect royalty owners. Too much legal and technical jargon for me to comprehend. Should we royalty owners be concerned. Thanks for the help. John M
In general, I have been very pleased to be included in a secondary or tertiary recovery waterflood or CO2 Flood fields. Although my original well decimal amount went down, I was then paid on EVERY well in the field at the new decimal. My wells may have ceased production depending upon where they are in the field but I am still paid on wells in other sections. Also, the increased pressure from water or gas flood has improved the production on my wells as long as they were alive. The goal of enhanced recovery is to get as much hydrocarbon out of the ground as possible and royalties into the mineral owners and working owners hands. As a mineral owner, I would want that. Our family has revenues from these types of recovery efforts going back decades since the enhanced recovery extends the life of the field quite a bit.
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Thank you for the reply and the analysis. This is the first for me and had terms that I was not unfamiliar with. One question if they use gas from the wells to pressurize, will the royalty owners be paid for that gas–I assume it depends on the lease agreements. Thank you for the help. John Mann
Depends upon your lease clauses. If you have the clause that says “free use of oil and gas on premises” then most likely not from an injection point of view. But if they inject gas and it comes back along with the oil stream and they sell it, then maybe so.
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