I agree with Charles that Louise should consult an attorney who is experienced in ROW and able to draft a detailed legal agreement(s). There are many considerations and issues that should be addressed. It is often best to have separate agreements for pipelines, electric lines and sites for wells or compressors or frac pond. The problem with most comprehensive agreements is that there is a single payment for an ability to install multiple lines - and in the end the landowner is short-changed in terms of overall compensation. Also, some elements outlast others - an electric line or road may continue in use to other properties long past the existence of a well. It is important to ask a lot of questions and get all the details to put into a written agreement. We all like simplicity, but too often we find out later that plans were more complicated than first described. For example, think of a SWD well. It needs a site and a per barrel disposal price. But will saltwater arrive by roads? Then over whose lands and how many roads in how many directions? How many trucks per day? Who will take responsibility when the truck leaks water all over the ground? Will saltwater arrive by pipeline? How many pipelines and from what directions and whose property is involved? What about electric lines to run the operation? Is it on-lease or off-lease water? It is only water from your responsible operator or a commercial operation with water from all over? There are a lot of moving parts and the landowner should take the time to gather as much information as possible. Be wary of a blanket agreement for a single payment, unless limited to installation of X, Y and Z and with the stipulation that if the grantee wants to add A, B and C, then it needs a second or amended agreement. And go and inspect to see if the property is being maintained and that there are no spills and messes. Do be wary of an attorney who tells you that more dollars is the only issue and the terms of the agreement do not matter.
Anadarko to cut spending elsewhere to drill in West Texas. “Anadarko Petroleum Corp. plans to reduce spending in the oil patch next year, focusing on drilling sideways wells in the Delaware Basin in West Texas, the DJ Basin in Colorado and the Gulf of Mexico. The Woodlands-based oil explorer said Thursday it will spend $4.2 billion to $4.6 billion in capital expenditures in 2018, down slightly from a budget of $4.5 billion to $4.7 billion this year. Eight out of 10 dollars spent in the oil patch will go to one of the company’s three key plays – the Delaware, DJ Basin or the Gulf. Anadarko expects to see a 20 percent return on the cash it invests, while also boosting oil production growth 14 percent over the prior year.” More at Chron.com.
A LOT more wells to be drilled by Anadarko in the Mentone to Orla
area and west into Culberson and south Reeves to the heart of the southern Delaware basin.
Figured you’d want to know.
near Verhalen
Please forgive me for the repeated passages.
Louise, Great advise from Charles and TennisDaze, Also include an additional fee for additional wells drilled on the pad site. This being a stacked play the operator may drill multiple wells on one existing pad and you’ll want to be paid for each additional well. I included a fee of $8000 for each additional well drilled on my pads.
Thank you Mike Miller and TennisDaze for you information.
Mike I like the information of additional wells drilled by the people wanting a Pad on my land. Looks like I am gonna need some really good help from lawyers. Ugh…but if necessary it is a must.
TennisDaze, the people wanting to place the Pad on the land is for a horizontal on their lease, not mine. We only have 477 acres and the Pad would take some land for years. Don’t know yet if it is rectangle or square, will get package in about a week. Then will have more knowledge.
All I wanted to know is if it is an advantage or disadvantage for allowing another company to put a Pad on our property, since we are small acreage.
Once again, thank you so much for all the help as I am at a loss for knowledge.
Louise
Hi Louise!
The $7,200 for a 90,000 sq ft pad site they are using appears to be from the University Land Board’s Rate and Damage Schedule: Rate_Damage_Schedule.pdf
Many people are using the schedule, because the University Land Board is considered a very trusted institution, but as you read through it you will find that the quoted amounts are minimums.
Also, note what the schedule says regarding damages for roads.
You can negotiate to have permission to use their roads. For where the roads will be built (Down the center of your property for future property development? Along one boundary line or another to minimize interference with normal operations?). You can even require them to re-surface the roads and re-dig the ditches so often, including one last time before they pack up and leave.
And do not neglect to address the issue of drainage. If they build a road that interrupts the natural drainage, they can really mess up your lands. Have them install culverts where necessary to prevent that sort of thing.
Cattleguards and their own gates, too. They will probably want to install “Push Gates” so their drivers don’t have to get out and unlock every gate they come to.
Fences around their facilities.
All kinds of things to be considered. What do you use the land for now?
The Pad will be tied up until any successfully completed well(s) stop producing. That could be 30+ years, possibly over 40+ years.
If you are growing crops or using it for stock grazing, you will lose the use of the land for that long.
If they propose to drill a water well, make them drill it to a water table not presently being used on the land. Leaving it when they pack up and go will not cost them anything. Their surface equipment is not designed for farm or ranch use, but they can certainly leave the pipe in the ground for nothing.
You wrote that the Pad was going to be used by another company. That is not unusual because in drilling horizontal wells they want the horizontals to pass through as much of the producing formation as possible. Starting from several hundred feet away from their lease lines, they can begin perforating the horizontal pipe almost at their boundary line.
Since the wells planned for the Pad apparently do not include your lands, you apparently do not stand to receive any royalties from them. Many times, however, I have seen where “Off Lease” surface owners such as yourself have successfully negotiated for an overriding royalty in the other company’s wells. 1% or 2%.
Have you thought of having someone assist you in your negotiations?
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
Thank you, Charles Emery Tooke III and TennisDaze, I truly appreciate your help in the matter of Pad. What I was really asking is this:
What are the advantages and disadvantages of a Pad for another company on my land? I have undivided land and I own 1/2 of the 477 and two other people own the other half.
Have a good company that plans to drill on our land in 2018 and am concerned if the small amount of land might hinder them being able to drill a horizontal. If it wouldn’t hinder our drilling then I could go forward with the Pad if desired.
Just wanted to know the advantages or disadvantages.
But, once again, thank you all for your valuable information. You all have really been a great help.
Louise
Louise, It all depends on the location and shape of the mineral tract. Is the tract a long rectangle or a square or an angle? Your lessee may want to drill a 2-mile lateral and may need to pool your 477 acres with adjacent land or maybe want to divide into 2 different units. The related well may or may not need a location on your tract or it could be at the opposite side. You can talk with the landman at your lessee and ask about plans. Look at surrounding lands and see the most likely position of any well.
I received $12K/acre for 5 acres in Sect. 300 Blk 13 about a year and a half ago.
New Mexico new stacked shale play hotspot? Texas Lonestar Colision Is This The New Sweet Spot For Shale? “New Mexico’s field production of crude oil has doubled in the past five years, to 462,000 bpd in August 2017, according to the latest available EIA data. New Mexico “may well be the next wave,” Haag Sherman, CEO at Houston-based investment firm Tectonic Holdings LLC, told Bloomberg. “If Exxon’s looking at it, that’s probably a good sign,” Sherman noted. According to Sam Cobb, the mayor of Lea County’s biggest city, Hobbs, oil companies have long-term plans for New Mexico’s part of the Permian. “They’ve made it very clear this area is where they’re investing heavily and plan on doing it for a long time,” Cobb tells Bloomberg. While New Mexico sees increased activity in deal-making, West Texas M&As have started to slow down, and signs have emerged that parts of the Permian may be heading toward hitting its geological constraints.” More at Oil Price Mag. ////// says: These guys claim to be experts but the stacked shale play
‘sweet spot’ extends up in New Mexico and down to the Rio Grand
in Reeves, Culberson Hudspeth, and lower Brewster counties. It doesn’t stop with the Rio Grand, but continues into the Mexican states of Coahila and Nuevo Leone. Devon Corp is down there developing that area right now with many other companies moving in. Reeves county is going to
continue to grow. This is just the first wave of drilling activity WolfBone and adjacent plays. They have yet to discover another 5 stacked shale plays under the Devonian, Silurian, Ellenburger plays at about 14,000 to 19,000 foot depths…that also cover this whole area. They can also be developed with horizontal drilling and compound fracking. No one has yet really estimated the tremendous amounts of pay zones in this area.
There are 17 producing zones that I am aware of stacked at various depths in Winkler, Loving, Ward, Pecos, Reeves, Brewster, Culberson, Hudspeth counties of west Texas.
near Verhalen
I have had several people wanting to buy my minerals. I’ve had three offers that varied by a very wide margin. The first two were low-ballers. The third one was a little better. My well is in Sec 140, Blk 13 on 320 acres. One offered only $6500 a mineral acre but I’ve been told that minerals in my section were selling for as much as $10,000 per acre.
Can anyone verify how much minerals are going for in my section and tell me who is offering it?
Thanks,
Glen Kirk
Mr. Tom Parker…
Eagleclaw is building a second natural gas refinery east of Toyah. Saulsbury Construction is the contractor.
All these installations with rows of gas compressors are RECOMPRESSOR
STATIONS…not refineries. A recompressor station compresses the gas from the gathering lines and bucks the pressure up to at least 900 PSI
to pump the gas into transmission pipelines that go to refineries. A gas refinery will have one if not several CRYOGENIC cracking units where the
liquids and the various gaseous constiuents of natural gas are extracted.
For the plastics industry ETHANES are removed by the cryogenic cracking
unit and liquified for either transportation in a pipeline or in railroad
tanker cars to the manufacturers of extruded polyethylene pipe and
other cast products.
Apache is vertically integrating all their holdings. They are setting up to generate their own multi megawatts of electrical power using natural gas fired turbine generator sites…and will supply their own electricity to both
gas wells with their condensate tank batteries and to oil wells with their
oil tanks connected to common gathering lines for both gas and oil separately to transport the product to the nearest Apache built refinery
where the saleable products are refined for distribution to Jobbers who
supply the fuels to gasoline/diesel filling stations all over the USA…and other Jobbers who supply natural gas to other electrical generation facilities that don’t belong to Apache…like AEP for instance.
Liquified Natural Gas (LNG) is produced at these refineries with CRYOGENIC cracking units and shipped by pipeline to Gulf Coast offshore loading terminals to fill tankers that take the LNG to countries all over the world that use LNG to generate electricity and heat homes or cook food on.
All that means a LOT more pipelines being run in the region of the western Permian Basin and the Delaware Basin. And it means a lot
more vertical and horizontal wells being drilled to tap the stacked shale plays and supply the many refineries being built or planned to be built
in the future in this area. It is better to refine natural gas and oil into
products in this area of west Texas than to ship it to the Gulf Coast for
refining because we don’t get interrupted by hurricanes.
There will be MORE interstate transmission pipelines built to take refined products to the Atlantic coast states and Pacific coast states so they can
produce their own electricity and fill their tanks with fuel.
We are talking about Billions of gallons of gasoline/diesel/LNG-Propane
shipped PER DAY to be used domestically in the US, Canada, and Mexico…and a like amount of LNG shipped by tanker to other nations around the world.
Pulling the regulations off the domestic producers, as Trump has done,
fueling the boost in the US economy and adding jobs, jobs, jobs and
more and more refineries and electrical generation plants are built.
I used to be an electrical construction foreman for KBR, BECON/Bechtel,
Fluor Global Services, Ranger Plant Construction, and Saulsbury Construction…and IF I were still physically capable, I would relish building plants everywhere. I always got great satisfaction at the end of the day looking back on what my crews and I had accomplished that day…and immense satisfaction when that plant went online. My crews
and I could drive by the plant and tell our wives, ''I helped build that plant…aren’t I good?" That’s what pride men who work with their hands and their minds in construction have…and that’s what President Trump has tapped into.
Stephen.
what you are being offered to purchase is in the range of lease offers extended to my cousins who hold property in the same general area.
Kenneth,
What is the name of the company leasing in Blk 58 that you mentioned?
Kenneth L Haag,
I can put you in touch with a landman buyer for that area if you and your family wish. They are moving west out of Orla in both Reeves and Culbrson counties developing pipeline infrastructure primarily. IF interested, email me at .
near Verhalen
Lawrence, thanks but we are currently ina 3 year lease with two years remaining. I think Orla is a ways N of us.20 miles? We are 12 miles N of Toyah in sections 15-16
MA Smith. I have been watching Lease Alerts from Courthouse Direct and the company that is noticeable to me is Jetta Permian obtaining numerous sections in Block 58. Reason being, we leased with them in Jan. 2017. We have sections 15-16.
Happy Thanksgiving. Any input on these places? I’m trying to get better sense of what’s going on around our land off FM 2903 between Toyah and Balmorhea. Not an expert on this stuff but can share what I see. What all goes on at EagleClaw’s East Toyah plant on I20 between Toyah and Pecos? The place is big enough to look like a refinery…the website has technical industry language but talks a lot about cryogenics. Hoping this means they are finally going to start shipping our gas overseas. Down FM 2903 from Toyah, Apache has something called Cheyenne Processing Plant. Looks like at least four large compressors run there. Other than that don’t know what happens there… A little further south on the other side of FM 2903 is another plant. Maybe three compressors…not sure who operates or what else goes on there… Also large construction project just now being started on nearby on other side of FM 2903. Another plant maybe? Also super large pipelines are being laid parallel and perpendicular to FM 2903 from Balmorhea moving north. What $/rod have you gotten for these easements? Few miles south of Toyah fresh water is sold. Trucks can just pull up and get filled from pit they have built along side of the road there. Where does water comes from? Do these places drill their own water well or does it get trucked in and just stored in pit? In summer I’d think a lot of that water would evaporate. They even allowed to tap into the aquifer? It takes so much water to frack after all, but I guess where else does the water come? Temporary water lines along the side of FM 2903. Not sure where goes or who serves. Apache has massive laydown yard little further south from this. It’s pretty new. Not much in it yet. But from the size of it must have big plans. Lots of activity going on. Hope this helps getting others up to date on activities. If you have knowledge and answers to my questions please share…
Lawrence, I enjoy reading your contributions to this forum. We have two sections in Block 58 N of Toyah. I don’t see much activity except one company leasing most of the sections in that Block.
Tom…That corridor along both sides of FM2903 will soon become
Refinery Row. What sections are you and your family’s holdings in?
CR336 goes east off FM2903 and becomes CR112/Barilla Road as it crosses state highway 17 and goes to Hwy 285. It is being developed
as a multiple pipeline right of way to connect produced gas and oil to
the gas plants in Coyonosa and the new one being built on the east side of 285 where Reeves and Pecos counties meet. Not far from there, further south in Pecos county, a crude oil refinery is being built.
Rumor has it that another gas and crude oil refinery is to be built
approximately 2 miles east of Hwy 17 off County Road 331.
near Verhalen