Does anyone know exactly what this is all about? Apache sent a letter regarding p-17 & the Railroad Commission rule 26 & 27. Seeking exception from common storage and commeon separation by well test? They are asking if we want to protest this move I assume they want to execute.
Any info greatly appreciated…
P-17 is approval to commingle production from multisection wells that have different ownership. Effectively, operator is trying to get approval to combine production from various leases from what I presume are Allocation Wells. Some mineral owners that have a large enough interest may protest to have common storage and common separation set up but reminder on this front - it is VERY expensive to do so and may discourage operator from drilling said wells.
The question is how the production is measured and allocated to the wells. If it is be well test, keep in mind that well tests are generally performed only on a periodic basis, such as every 8 to 12 months. If the production is allocated as a set percentage among the wells based on the well tests, then it will not reflect intermediate fluctuations in production or the varying rates of decline of the wells.
Thanx T. Daze,
It does state "Apache seeks exception for common storage and common separation by “well test”. It identifies “existing” wells, & w-10 oil. It does not however state what kind of testing is being done, I would assume production phase testing
Obviously Apache is for this as they are applying, what reasons why I would want to protest would be of concern? Unfortunately, communicating w/ operators these days is beyond frustrating, sometimes taking days, weeks, even months to get answers.
Seeking any input from knowledgeable forum members!
Thanks for the reply Matt, so this is being done before actual well is built or an existing one wants to drill laterally/horizontally across different mineral owners/lessors land?
I recently read this on “Allocation Wells”, any thoughts on this? Seems to be a hot topic or one w/ some gray area? Debate over Allocation Wells Continues - Graves Dougherty Hearon & Moody
Reading the above, how does a lessor or mineral right owner know how allocation would go? This article brings up likely issues with that.
Thnx!