Please especially call if you or a relative got taken in by this scam.
HB 3226, to amend MIPA (the forced pooling statute) to allow drilling permits to be good for 2 years instead of one, had a hearing. Due to potential for mischief here, we are keeping a close eye, but the sponsor and committee members have pledged not to allow any floors amendments that would open up the door for broader forced pooling.
SB 817, to require BTU values to be added to royalty stubs. We will support also. Hearing was yesterday. Have not heard yet how it went.
HB 3372 is a very dangerous bill. Craddick is the sponsor, which is puzzling, but it prohibits breach of contract actions against payors when money is withheld due to a title dispute. Apparently they think they are protecting Sunoco and the other gatherers who are payors but not the operator from being drug into a suit, but very concerned it will be interpreted to give the okay to withhold money for flimsy title dispute reasons and be insulated from getting the lease terminated.
SB 1156 increases setbacks to 1500’ around private schools and child care facilities. No movement yet.
Regional pressures are rearing their heads today for natural gas–Waha cash prices were as low as 30 cents.
An emergency maintenance by El Paso contributed to this but as loads decrease in the spring and early summer this is a good indication of where prices may be for a while. With production increasing as crude has rebounded to $60 and if flaring is restricted this pressure will continue. On a positive note, once gxp starts (scheduled for October but may be sooner) it should alleviate the problem somewhat.
If you have interest in this region be prepared for your royalty price for gas to be in the single digits or negative range for April.
In an unprecedented display of both the severe constraints impacting the Permian Basin and the tolerance the region’s crude-focused producers have had for deep discounts on their associated gas output, natural gas spot prices in West Texas reached a new nadir this week.
Historical precedent went out the window in West Texas Monday as prices averaged well into negatives region-wide. The entire West Texas region on average traded at negative 43.0 cents on the day, according to Daily GPI.
Waha averaged negative 64.0 cents after dropping 92.5 cents day/day. El Paso Permianplunged 53.0 cents to negative 31.5 cents. Transwestern tumbled 99.0 cents to average negative 56.5 cents on the day.
Warning- Operators are trying to push out of committee the bill which takes away your ability to sue for breach of contract if an operator wrongfully puts your payments in suspense. See this thread for more details.
Chevron buying Anadarko!! More to come. Probably a function of Anadarko’s weaker financials and having a good footprint in the oilier parts of the Permian, while Chevron’s huge acreage block of owned minerals is much in the gassy areas. a
Apache announces shut in of dry gas production due to extremely low prices in Permian. Platt’s estimate was it was about 95% of Apache’s dry gas production, but that seems high, because associated production from wells that have substantial oil or wet gas is substantial.
My crystal ball says we are seeing the worst of the gas differential now, because hotter weather and more pipelines, plus more end users being added in Mexico, where there is excess pipeline capacity, should ease the situation. However, the volatility in the gas markets makes the oil markets look like a Sunday drive in the Panhandle.
Milestone begins construction of 80 acre oilfield waste disposal site in Orla. I was told the backup along Hwy 285 at Orla is taking 3+ hours to get through that intersection during rush hour.
Rush hour and Orla used to be classified as an oxymoron.
