We own 223 acres in Atascosa County. In May we were approached by O & G gas co on a SWD 4000 bpd permitted well that has not been working for the last two years. They wanted to start using it again. We signed a contract for .10 per barrel. They also said that they would clean up the existing plant, tank battery, cattle guards etc. Our place has been neglected by them for the last 20 years. We found out that the casing was bad on the well. It does not look promising. All work has stopped including the clean up. My question is why would they approach us now? Up until two years they were using the disposal well. We never received any income before. Is this worth pursuing? Any advice is greatly appreciated.
Dear Valentina,
Commercial SWD wells can be real money-makers for the landowner. In Atascosa County, I do not know what hauling costs are, but they could be $2.00 per bbl, or more. $.50 per bbl for an existing SWD well would be a real windfall for you.
These can be intricate little agreements, and as you already have learned, keeping the facilities painted and in good order, free of trash, etc., can be an important part of the agreement. A termination clause is a great idea. Location of tanks or offloading stations are important for your enjoyment of the surface.
They were disposing up until 2009. Should we have received a price per barrel? Is it worth pursuing?
Hey Valentina… what ended up happening in your situation? Are you still in limbo or have you made some progress?
Christi
Valentina:
Did you have a contract on this SWD during the time it was being utilized? Was it being operated by the same companies or different companies? It’s up to you if you want to pursue the past but good luck. Did your statement about cleaning up the site, plant and tank batteries, refer to pollution at the location or heavy vegetation inside the tank battery? If these conditions exist, the location needs to be inspected by a RRC field inspector as there are Statewide Rules which address both of these matters.
Nothing yet. We have heard rumors of them drilling another SWD next to the other. We were going to get our attorney involved in August, but we are waiting another month to see if anything happens.
CEarly said:
Hey Valentina… what ended up happening in your situation? Are you still in limbo or have you made some progress?
Christi
We did not have a contract in place. I did get all the disposal records from the RRC. It is the same oil company. At this time, because the well is not disposing, there are trucks that come all day to collect salt water that is piped in from other fields. As far as cleanup, there is a bubble on one of the rusty tanks, fence lines need to be cleared. It is about a mile from the main road that trucks come in and out. It just looks like a huge eyesore. The plant is closer to the main road and looks really old. There were two small buildings that were torn down but never hauled off. When we build our home, it will have a direct side view of the plant. It is just a big eyesore.
charles s mallory said:
Valentina:
Did you have a contract on this SWD during the time it was being utilized? Was it being operated by the same companies or different companies? It’s up to you if you want to pursue the past but good luck. Did your statement about cleaning up the site, plant and tank batteries, refer to pollution at the location or heavy vegetation inside the tank battery? If these conditions exist, the location needs to be inspected by a RRC field inspector as there are Statewide Rules which address both of these matters.
Valentina:
As I stated earlier, you can contact the Texas Railroad Commission in regards to the site, plant and tank batteries in order to have a field inspector visually identify any violations of the Statewide Rules (pollution, etc.). The contract end of this will most likely be a legal matter whereas legal assistance will be needed.
Valentina said:
We did not have a contract in place. I did get all the disposal records from the RRC. It is the same oil company. At this time, because the well is not disposing there are trucks that come all day to collect salt water that is piped in from other fields. As far as cleanup, there is a bubble on one of the rusty tanks, fence lines need to be cleared. It is about a mile from the main road that trucks come in and out. It just looks like a huge eyesore. The plant is closer to the main road and looks really old. There were two small buildings that were torn down but never hauled off. When we build our home, it will have a direct side view of the plant. It is just a big eyesore.
Charles S. Mallory said:
Valentina:
Did you have a contract on this SWD during the time it was being utilized? Was it being operated by the same companies or different companies? It’s up to you if you want to pursue the past but good luck. Did your statement about cleaning up the site, plant and tank batteries, refer to pollution at the location or heavy vegetation inside the tank battery? If these conditions exist, the location needs to be inspected by a RRC field inspector as there are Statewide Rules which address both of these matters.