I use to have a piece of property near Arcadia that has been producing for several years now ( I kept the mineral rights). Recently, Ovintiv petitioned for a “set back” allowance which I think will allow them to space their wells closer, or use the same platform to install a new horizontal line. I am not sure which scenario best describes the allowance. (Docket 2024-005 Cause 130-28) Also, just about the time that I received notice from the Utah Oil and Gas Commission I started getting quite a few calls on purchasing my mineral rights. Does any one have a better read on what the “set back” allows for or if things are picking back up in the Basin. Thanks in advance for any input. Richard
Without being able to see the language on the case, I will assume that they are trying to set the distance between the wells so that they can drill infill wells. This is commonly called “increased density” and is a way to more effectively drain the reservoir. As you can tell, that usually sets off a flurry of offers to buy. I ignore the offers and wait to see what happens, then collect my royalties which (so far) have exceeded the offers that I had received.
Thank you, for the great information. I will keep my fingers crossed and hold on to what I have.
This request by Ovintiv was approved by the board in the January board hearing. The order does two things.
First it re-oriented the spacing from stand up to lay down drilling units. Newfield, Ovintiv’s predecessor drilled north/south wells in this area believing that was the best orientation. However, Ovintiv has since learned that lay down (east/west oriented) wells produce better in this area.
Second, Ovintiv requested that the heel/toe setbacks be reduced from 330 to 100 feet. They demonstrated that they could produce from as close as 100 feet from the drilling unit boundary and not interfere with offset drilling unit rights. Most companies in the Basin are routinely requesting and getting approval for these reduced setbacks on the heel toe. The setbacks on the north and south of these lay down drilling units remain at 560 feet to allow for drilling unit boundary wells. You are correct that the companies drill multiple wells from the same pad but that is up to the company and is not addressed in the request.
You are correct that when companies request new or adjusted drilling units that is a clear indication that activity is going to pick up in that area and mineral buyers are going to look for opportunities.
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Hello Gordon; Thank you for the information, hopefully things will move forward soon. Have a great day.
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