Just want to say thanks for the advice to @timmyd, @M_Barnes and @Steve_Leker.
I’ll start with EOG and also contact the Texas Comptroller’s office as well RE old royalty payments.
pghmike4
You’ve gotten some good advice and hopefully will get the information you need about this particular interest from EOG.
Based on the complex inheritance chain you described, it seems possible there could be other separate mineral interests. Some research in the deed records might be logical regardless what EOG tells you about this one.
Reeves and a number of other counties do have their records online and available to search at no cost. Here is a link https://reeves.tx.publicsearch.us/
I have another question for the folks here:
Aside from 4 wells in production from the square mile immediately to the north, there are another three that are marked as ‘approved permit’. I assume that means just what it says – no well has been drilled, but EOG Resources is thinking of drilling there.
All of this activity for the wells in production, as well as those just permitted started in 2021.
Anyway, my question is: when guesstimating the value of the mineral rights, is it reasonable to estimate that the permitted wells will eventually produce something comparable to the already drilled wells?
The four wells already operating are:
WAPITI A 731H API 42-389-39351-0000 Production to date: 2,229,119 MCF, 195,800 BBL 3/17/21-present
WAPITI A 712H API 42-389-39566-0000 Production to date: 1,046,513 MCF 109,107 BBL 9/1/2021 - present EUR 118,785 BBL 1,170,299 MCF
WAPITI A 751H API 42-389-39352-0000 Production to date: 2,516,765 MCF 78,435 BBL 3/17/21 - present EUR 141,248 BBL 4,212,152 MCF
WAPITI A 733H API 42-389-39567-0000 Production to date: 1,960,523 MCF 174,477 BBL 9/1/2021 - present EUR 474,163 BBL 5,914,021 MCF
The answer would depend upon the length of the perforations, the reservoir, the completion techniques and how long after the first wells they were drilled if in the same reservoir due to pressure loss.
Anyway, my question is: when guesstimating the value of the mineral rights, is it reasonable to estimate that the permitted wells will eventually produce something comparable to the already drilled wells?
If they get drilled, then sure, that is a reasonable guess for what they will do. As M_Barnes says, there is other info that could be considered if one had that info, but you are probably ahead of the game if you are trying to estimate based on old wells. In my opinion. I mean most people are just opening a check in X months and treating it like Xmas and expecting everyday to be Xmas from then on, so if you are doing some math, then good for you.
In general, if its been 18 months since the permit was approved, there is a very low chance that those wells are getting drilled. At least not soon. They drilled 5 more wells in early 2022 and they didn’t drill those three wells, so that would suggest that maybe they aren’t getting drilled. There is space on the Eastern side of the unit for two more wells, so I could see the 711H and 732H wells getting drilled eventually. Doubt the 713H gets drilled ever.
The upside is that there are 5 more wells waiting to come online (DUCs). The are in the same Wolf A/B/C depths, similar spacing, same length, and you’d guess EOG will complete them the same way.
Here are the wells here in table and map form. On map, the active wells are in blue, the DUCs are in orange, and the permits are pink.
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Apache has gotten active in drilling and leasing around Toyah again. The GLO has approved a new sliding scale royalty for gas in the area. A rig has been in the area for a few months and apparently another is being added. Hopefully gas prices and takeaway capacity for gas hold up to keep it going.
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That would be nice. Would not mind hearing that apache has decided to put another well or two on our lease.
Hey Wade, Apache drilled two wells in our Bonsai unit and had a technical problem while drilling a third, pulled the rig and sent it elsewhere while they figured out the problem. Problem is solved now and the drilling rig is coming back at the beginning of the year to finish the third well and drill two more. The two new ones that were just drilled should be completed by the end of the year and online.
Dan
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