Hello All,
One of my holdings is an ORRI in the South 228.57 acres of S/2 Block 37, Sec5, Township 5 in Midland County Texas.
Currently there are four operating laterals, two since mid 2019 and two since mid 2021. Two are in SW/4 and two in SE/4. Both are towards the outside perimeter respectively. In the middle is nothing and I expect it to stay that way for a while as it appears this may be a stranded section now. Section 8, South of this is the same and as best I can tell they would have to put in 1-1/2 mile laterals which are no longer being considered by most companies at this time. I see this as highly unlikely anytime soon for any improvement as they are Pioneer controlled as well.
What I find interesting, is that recently I have been getting snail mail offers to buy me out at quite high values per NMA? I try and stay on top of what is going on and I see a lot of activity around this section, but nothing indicates to me any improvements soon for this location. Is there anyone here that may know something I don’t? I have emailed Pioneer and no response on this particular issue. Looking at Enverus, RRC records, and other methods has produced nothing. So why this big interest and high values? My only thoughts are maybe they think I have rights to 320 acres of S/2 which would put parts of another twelve laterals in this.
Thank you for your time and any info you may be able to pass along,
Sincerely,
MK
Hi Micko1 TX, plenty of room to fill in with more horizontal wells. We have interest in the Leo wells south in section 8. Now the SE4 of section 4 next to you I might call interesting. The Harris wells 17-20 are DUC and thought they might turn around and drill more Leo wells but nothing has been permitted yet. Time will tell, if you are receiving offers somebody knows something we don’t. Hang in there–Tim
Thanks Tim, I too am aware of all of the surrounding things as well. Yes Sec4 has been active as are others within a 6 mile radius. I have interest in some of those as well. I find it strange though to be having offers in this small area now due to most companies going to the 2.5 milers and above. The SE/4 Leos, were a byproduct of submitted and approved Parsley Permits prior to sale to Pioneer. Where the Leo Wells in SW/4 had been operated by Parsley and passed along in the sale to Pioneer.
mk
I went thru a very similar situation in New Mexico. Was about to believe that for some reason there was no oil below my two sections part ownership. Got lots of offers as well.
I don’t know for sure, but it appears what happened is that some holdouts in those two sections made it easier for an operator to just go somewhere else.
Then it all came together. Within the last year or so, I have now 5 two section wells done and another two probably done just not paying yet. Be patient would be my advice.
@DonFromTexas , Thanks Don, I have no intention of selling this. I am aware of what is going on. Just curious that out of the blue I am receiving very high offers for this one area? It is the only ORRI I have, the others are WI. We all took a beating in 2020 when prices cratered, so it makes me wonder what I don’t know? I have a son in law in the business so access to things makes it a little easier, but this has me stumped. At some point I expect that Pioneer will come back and drill again in this area, but I expect that to happen in maybe 4 to 5 years at best.
Again, many thanks for your advice.
mk
As one new to the forum, is it a negative that Pioneer is the operator? I just received some new division orders on some horizontal wells they completed in Midland…so just trying to figure how all this really functions…
@rex, No, it is not a negative at all. They just happen to be a larger Public Corp and have shareholders. Therefore they are now more prone to slow down on doing things so the shareholders can make a profit vs going gang buster on drilling. I have had no issues with them at all. Only this property is one that is small and I see at as one that will be awhile before they choose to do anything with it due to circumstances in the overall market for investors and best for the company. I as a royalty owner would like to see movement as others would as well, but that will only happen at there pace and not our wishes.
Oil and gas is here for a longer time than many think it will be. Time will be on the side of those of us that wait.
My thing with this one holding was the fact that I have started getting very High offers for something I know or suspect should not command that value at this time as the area appears to be somewhat stranded by all accounts due to the current atmosphere of affairs.That will change in time.
It is unfortunate that a moderator changed my original title to what it is now. Everyone seeing this thread, is looking at it as a stranded area, which in some respects it is, but that is not what I was asking about. I hope that helps answer your question.
BTW, Welcome to the forum. Pioneers royalty owner email is a good place to get answers. I suggest that you be polite and ask specific questions. Have some background info to support the question though. That in itself takes some research and understanding and this forum is a great place to gain the knowledge.
MK
Thank you for your insight… I am in Houston, and last week Pioneer was in the local business press a good deal due to its excellent performance this last quarter and how Wall Street was very positive. I also started receiving oddly higher, and historically crazy high offers on some of my 1/64 of 1/8 non working royalties in Midland starting about two years ago…and curiously Pioneer completed 10 new horizontal wells through my areas just last October…so I suspect that the Landmen knew that Pioneer was going to, or had started work in these sections… and you are right, the world is likely to be fueled by oil & gas products for at least the next century or two…unless Vlad looses…
@Tim_Martinez ,
Hi Tim, I have been watching those sections as well. Yes , it is interesting as to what is going on in Section 4 as I have interest in that as well. I noticed today that the verticals in section 8 are now shut in and plugged.This has happened over the past few months. This may be an indicator that additional horizontals could be in the future for sections 8 and 5. I have no clue at this point, but it peaks my watching it a little more closely. MK
Hi Mikro1 TX, I suspect the Leo wells were shut in when they fracked the Zoey wells in November and December right next door in sections 16, 9 and 4. These wells started producing in January, we expect division orders soon. I don’t see any new permits for section 8, thought they might drill more when they drilled the Harris wells.
12 new permitted wells 5/25/22 in section 3 Blk 37 T4S and section 46 Blk 37 T5S called the Driver 3-46. Tim
