Jeff – do you have a description of where your land/minerals are located… such as the Survey Name, Block, Section or Abstract Number? For example: T&P RR Co, Blk 55, Sec 19, A-1234. Thanks – Later – Buzz
It depends on your Lease Agreement, But, if the lease agreement does not have particular formations defined in it . . . you are stuck. Unfortunately for most of us lease owners, with no experience, a clause defining particular formations did not come to mind with our initial lease agreement . . . . . . unfortunately, I should have definitely caught this myself when I participated in the only lease agreement we have now. Back then I did have experience in the oilfield but alternitive formations never entered my mind.
Blk C-11, Tract 19, AB-4012 BLK C-11 SEC 19 PSLE/4
We responded to the lease offer letter and were told “As of right now C11 is just outside of our buy area”.
Is this normal to get an offer that is not an offer?
Jeff – just trying to learn more… who was the lease offer letter from… it appears it may not have come from Apache…??? Thanks – Later – Buzz PS – you have no problem knowing where your land is located, correct?
How much is a barrel of brine going for?
I have 20 acres of mineral rights in NW corner of section 39 block 13 mineral rights and around 12 AC of the top. Currently under contract with Apache. Do you know if it looks like any drilling will be taking place in the near future on the imeadeat south side of Hwy 10, where the p property is located? Also, Apache put an Illigal rd through this property to access section 40 block 13 collection points. They are offering 40$per rod as compensation for the road and 40$ per ROD for trespassing. Is that reasonable or should I ask for more? If so, how much? Also, any insight on how much per AC the realestate (as in top only) is going for in that area? We have electric access near the state Hwy headquarters building on business 10. Thanks for your help, Melissa Avery
I do not want to reply but ask new Question. Can a well be permitted and drilled across two leases already with division orders for production?
Yes if I understand your question. It is more cost effective to drill one two-mile horizontal well than 2 one-mile wells. So a company may have one-mile wells in adjacent sections and then drill a two-mile well across both sections. Or if vertical wells are holding two tracts, then a horizontal well could be drilled across both tracts. The company may form a new unit or drill as a sharing well or an allocation well.
Any one have insight on the current reasonable rod for my location and situation? (Section 39 block 13). What is a reasonable rate for trespassing?
Melissa, you may want a landman or attorney to help you. Regardless, simply tell the company you don’t feel that is fair compensation and ask for more. For example, just say you want $100/rod as compensation and another 200/rod for trespassing (tell them that they ought to show their good faith) - I have no idea if those are fair rates, just an example. Point is, ALWAYS ASK FOR MORE , whether its for an easement, lease, sale, etc., the worst they can say is no.
Also, they’ve already trespassed and built a road, so you have the upper hand. Use that to your advantage because it’ll cost them a whole lot more to come remediate the existing road back to its natural condition and build a new road elsewhere. Threaten to get an attorney involved (and perhaps actually do that if they’re low-balling you), whatever you need to do, but just try to get more money if you’re fine with granting the easement.
Thank you for the reply. I am one of 6 owners. None of us have a working relationship and I am related to two! There is a dispute over exactly what percentage of land (top) belongs to each of us. We were all individually given offers of $40 per ROD and $40 for trespassingpassing. No company agrees to return property back to untrespassed condition. No time line though. I would like fair compensation and a some kind of time frame. I don’t know what kind of money I should be looking for. I have been told 5 years is reasonable for demanding the property be returned to original state. The road is a cut through from one side of interstate 10 to the other side where collection points are located, not my property.
I assumed the well across two operating leases could be allocated between the two leases based on prorata distance of producing zone., Thanks for the reply.
That sounds like a pooling situation?
If a oil company has you pooled into a mipa and sends you oil and lease offer do you have to sign with them… can you go with another company ? or because they already have a well and i just found out been producing for 3 months already with out our knowledge we have to sign with them. THe offer is stupid low… im not happy at all… especially how we were basically told we might be looking at $50 a month in royalties… seems like a complete ball face lie… block 13 npecos addition.
MIPA units are uncommon as there is a long process to comply with the statutory requirements. It is an expensive process. Colgate has gone through this process and gotten RRC hearings and approvals for MIPA units which underlie City of Pecos in Reeves County. It was the only way to be able to produce under all the small city lots. Is this where your lot is located? It is not likely that you will be able to find another company to lease where the well has already been drilled and the new lessee may not be able to now opt-in as an non-operating working interest. If you do not lease, then you will be an unleased mineral owner. For the Colgate MIPA wells, the RRC has issued orders for unleased owners to be pooled as 1/4 royalty interest and 3/4 working interest. The working interest is subject to a 50% charge for risk to be paid out of the 3/4, meaning it is an additional charge before payout. How large is your tract and how many net mineral acres do you own? If you provide more information about the well, operator, your minerals and the offer details, then you can get more guidance. If you have a tiny net mineral interest in the unit, then you will not receive large royalty checks, but this is true of any unit.
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thank you for taking the time to reply. My mom owns lots 19 and 20 block 13 in npecos, my uncle owns 17,19 and 20 in same block 13 in npecos. I do understand what you Are saying about they had to pool the people to gether and so forth. but what concerned me is that we have been in contact with colgate for at least 6 months and we barely found out that the well has been actually operating for last 3. I have my own oil in montanna from my side of family so i know how to tract data for the wels, and have been looking and trying to see data for theirs. King David Mipa. nothing is available. So for colgate to all of a sudden admit that the well has been producing for last 3 months was shocking. I want all the data on the last 3 months of production. I have also read cases where pooled owners have fought the fact that their land only produced x amount of oil versus the neighbors x amount of oil. I have been calling the lease broker multipple time in the last 3 months with no response… now that the new division orders are out they sent the lease. how can you tell us that our 3 tracts will produce only $50 of oil a month versus my neighbors tract (which 2 were actually ours he bought from tax deed in 1999.) will produce and earn the majority of the production. each tract is not a full acre. Colgate says they sent certified mail out in janurary to all owners. we didnt recieve anything. and i have been looking for the news paper publication in texas they said they posted regarding but havnet found yet. my mom has been at this same address for 35 years in az. there are few other little problems that are involved as well but im sure its to much to get into for you. lol Sorry for all the bad english punctuatuion and spelling im typing this in some what of a hurry because my kids are home for summer and always seem to be around when im trying to handle buisness…lol… I really thank you for your help and any more you can offer. I wish i could just talk to some one with experience in more detail regarding. We are going to talk to a few lawyers today and go from there… again thank you and God bless.
The MIPA unit situation is complex. First, some owners are being pooled into the well which is on smaller acreage and other owners are being pooled into the whole unit. Let’s say that Owner X is pooled into the 160 acres of the well and Owner Y is pooled into the 640 acre unit. Then X’s royalty decimal (DOI)will be higher from the well, but X will not participate in any wells outside of the 160 acres. Y will have a lower decimal due to the 640 acres, but will participate in all the wells. This situation may have changed to all being in the whole unit after the RRC docket rulings in April, but you need to search the RRC website and read the examiner’s findings and the final order for your well. Second, the DOI will vary by the percentage in the lots. Do your mother and uncle split lots 19 and 20 and then he owns lot 17? Then their DOI will be different. It all depends on the size of the lot and the fractional interest in the lot and the size of the unit. If your mother owns 1/2 of 1 acre in 640 acre unit at 25% - decimal = 0.5 ac / 640 acres X 0.25 =0.000195312. If she owns 1/2 of 1/3 acre in 640 acre unit at 25% - decimal = 1/6 ac / 640 acres X 0.25 = 0.000065104. I have no idea who told you some set figure per month of royalty, but that will change based on volumes and prices.
The King David is a good well. Texas Comptroller CONG is where volumes and sales are reported for severance tax purposes. Using Well Permit # 830360 and Reeves County and 1901 to 1905 (Jan thru May), will show well first sales in January and then full volumes in March through May. Colgate reported May sales of $2,300,246 on 40,850 bbl under oil lease drop. Jan = 1258 bbl; Feb = 27749 bbl; March = 40998 bbl and April = 48834 bbl sold. Gas drop is reported separately. You are correct that Colgate has not been reporting volumes for the King David or other wells without final lease numbers under pending at the RRC. Many companies do not report to RRC until completion report has been filed and a lease number issued. But they must report to Comptroller and pay severance. Copy and paste this address and then look at Lease Drop - Crude and Lease Drop Natural Gas. https://mycpa.cpa.state.tx.us/cong
RRC website for the King David well permit has a list at the bottom which includes copies of the newspaper publication in the Pecos Enterprise in Oct and Nov 2017 for protests to Rule 37 based on 154.99 acres in well. Notice may have depended on whether your mother’s lots are in the 155 acres well or the larger unit acreage.
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Remind me again - division orders come before or after the well is drilled? We received division orders for the seventh well on the family property over the weekend. I was out in the area in May and saw no signs of new drilling activity or a wellhead on either of the two sites associated with the Ash Unit, so I had assumed Apache backed off of drilling with gas prices and ability to transport in question.
Division orders are sent after a well has been completed and has begun producing. You can look up your property on the RRC’s GIS and it should show the permitted wells, which might give you more information.
Thanks. The ones from our birch unit provide some details on the GIS map. The Ash unit shows only permitted location for the five wells that comprise it.