I have just received an offer from Pillar Energy to buy my minerals rights in Divide County, North Dakota. This is much lower than an offer I received five years ago. I own approximately 80 acres in Township161 North - Range 99 West, Section 17:NW. The offer is $50,650. I am currently receiving royalties from Petro-Hunt on the Dohmstrriech 15B-20HN well. Can anyone give me information on what is happening in my location such as possible additonal wells, etc? Thanks much.
It would make sense that the offer would be lower since you have had years of production and oil/gas prices are down. No new wells in the township since 2016. That doesn’t mean there won’t be, just that the prices are not favorable right now. They can hold each section with the one well for as long as they have economic production. Your current well probably has decades to go, but at lower rates. They have probably not fully drained the section, so room for more wells in the future. However, they have dropped the pressure, so that may be a factor to consider.
Thank you for your response. Can you tell me what it means that “they have dropped the pressure” ? Looks like I will probably not sell at this point. Thanks again!
The shale reservoirs have natural pressure in the reservoir due to the weight of the rocks on top and the hydrostatic pressure from the fluids. As the well produces, the high pressure at depth is released once you fracture the shales. (Think soda bottle fizz release when you let the lid off. Same idea here) That first well is connected to billions and billions of tiny pores. The well may only drain the fluids from a few hundred feet around the borehole, but the pressure drain is much, much broader. It means future wells will not have the benefit of that pressure and the company may have to eventually use pumps as the wells will not flow naturally. That is an increased cost to produce due to the electricity involved. Makes the wells less economic.
1 Like
Thank you for taking the time to explain this to me.