Section 38 Reeves County Texas 3 Horizontal wells permitted

General Mineral Rights Discussion
1

According to a fellow poster Centennial has permitted three horizontal wells in section 38 Block 52 T-7 T & P Ry. Co. We own minerals in all of this section. According to a fellow poster centennial has spudded a well in 12/17/17. Can someone give me a status on this well? The name would be appreciated as well as the status on the other two permits.

Rick.

2

Good Morning Rick. These 3 wells permits were not approved until January 04, 2018.

The name of the wells and API numbers are:

API 389-36663/Barracuda A Well # U39H

API 389-36664/Barracuda B Well # U47H

API 389-36665/Barracuda C Well # U31H

After checking the GIS map and the status of the approved drilling permits I do not see where either of these wells have been spud(begin drilling).

Link to Approved drilling permit for well 389-36663:

http://webapps.rrc.texas.gov/DP/drillDownQueryAction.do?fromPublicQuery=Y&name=BARRACUDA%2BA&univDocNo=491434831

GIS Map of Reeves County Section 38/Block 52 T7S/A-1702 and surrounding area:

206-Capture.JPG793×538 72.8 KB

CLICK ON MAP TO ENLARGE

Clint Liles

3

Thanks so much Clint. So if my current lease expires 3/8/18 the lease has to be re negotiated. Is my thinking correct?

4

Hey, Rick!

Attached are copies of the Drilling Permits that were approved for the Barracuda Unit in January of this year.

Your lands appear to have been pooled with Section 47 to the South to form an 1146 acre Unit.

DrillingInfo has the Wells' Status as being "Well Location", which indicates to me that they are out on the land, preparing to begin drilling. To be building a location or set of locations is to have "commenced operations for the drilling of a well", which will typically hold your lands beyond the end of your Primary Term.

Unless your lease has some unusual provisions, you more than likely will not need to negotiate a new lease. but you can expect regular royalty checks to begin coming in sometime later this year.

Hope this helps -

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

202-BARRACUDAAWELLNO.U39HSTATUSASOF20180224.pdf (1.41 MB) 203-BARRACUDABWELLNO.U47HSTATUSASOF20180224.pdf (1.38 MB) 204-BARRACUDACWELLNO.U31HSTATUSASOF20180224.pdf (608 KB)
5

Hello Clint, I have sent you a friend request, as I have a question for you.

Thanks,

Sandra Wolf Nichols

6

Hi Sandra...Friends request accepted.

Clint Liles


7

Thanks for the information. The lease language says "commence" operations 90 days before the end of the primary term. Operations being drilling etc, in another paragraph in the lease. The operations definition in the lease fails to include "building a location" in its language. Mostly drilling, completing etc. so we have two offers to lease and EVERYONE is confused except apparently Centennial who bought or traded our 2015 lease from Manti and never informed us as the addendum in the lease stipulates.. So no-one knew Centennial had permitted three wells. Very frustrating and confusing.

8

I'd have to see your lease to comment further, but to have a provision requiring a company to commence operations 90 days prior to the end of the primary term wouldn't make any sense.

What you may be referring to is part of a Continuous Development Clause, which would likely extend the Primary Term beyond it's termination date if the company had commenced operations prior to the end of the primary term and might still be drilling or waiting for a completion rig or something like that when the termination date arrives.

Commencement of operations covers a wide range of things and building a location would normally fall under such a definition. There are occasionally provisions that require the actual spudding of a well (the bit hitting the ground) prior to the end of the primary term, but again, I would have to see a full copy of your lease.

Breach of any provision in a lease on the part of a Lessee would normally require your informing them of the breach and allowing the company a certain time period to correct the fault.

The approval of Permits to Drill are public record. Granted, a little difficult for the average citizen to find, but still considered public record.

Scan and send a copy of your lease. Without it, I'm flying blind.

9

I'll do that this week Charles...thanks for taking a look. I'll PM it to you.

10

Thanks everyone for your help. Manti sent copies of the assignment to Centennial. So the lease provision for that was fulfilled. It now stands we get to look forward to royalties sometime in the future. I really wanted to lease again. The lease is 2015 was leased for 2k an acre. The companies wanting to lease this past month were offering 10k an acre. Would have been extremely lucrative if this had happened. Can't say I'm not disappointed. Thanks again to those that provided info and scanned the lease. I truly appreciate it.

11

Mr Tooke: It seems that Centennial has NOT commenced drilling operations on section 38. They just permitted three wells then have done nada to actually commence surface/drilling operations. So, Centennial called now wanting a new lease for 38 on a lease that technically expired in the middle part or so of a March. Needless to say we are not very happy with Centennial whose representative LIED to use and assured us two months ago that operations were taking place. As such we are considering other bidders for 38 as 4-5 landmen have called inquiring about 38 which made us suspicious to begin with. If Centennial really wants to lease they’ll have to come up with more than 10k an acre which is the current offers from two reputable companies. More will be revealed…stay tuned.

12

Rick -

Sounds lucrative!

I lost my hard drive and am having to have a Data Recovery Company restore my files for me.

Can you send me your original message string?

This new layout on The Forum is frustrating, but I will try and send you a Private Message.

Charles

13

Never mind about the message string, Rick. When I responded above the entire string re-appeared.