Kenneth makes a good point - the more complex that production unit, the longer the DO’s take to get finished. And operators want to do them right the first time (since going back later to correct DO’s that are in error creates a lot of problems and issues).
But as Kenneth indicate, the first check you receive will be the biggest one you ever get since it will include several months of production.
Just hard waiting!!!
By the way…your explanation for wine rack was one I could relate to. The part about the offset/wine rack appearance makes more sense than what I looked up online.
Can someone with experience please answer a question for me? Once a well has completed, how long does it normally take to receive the division order? I have 2 that were completed the first week in April per the land man and just curious when we would start seeing royalty checks. Thanks
perfect Rockman…thank you for that.
For Elizabeth - time frame between well being completed (i.e. frac’d and flow back / tested) and receiving DO will vary from operator to operator. My experience is 4 to 6 weeks. Then another 4 to 6 weeks until you start receiving checks.
Thank you Rockman. If the wells were spudded in March and surface cased in March, does that by definition mean that the drilling to the depth specified in the lease and permit has begun? RRC viewer shows 4 in the “wine rack” are spudded and 2 surface cased. So my question is, has the 2 that have been surface cased begun the in-depth drilling or does the operator come back another day and begin the drilling to TD and do 4 back to back?
Thank you so much Rock Man!!
Rock Man’s timing estimates are a pretty good average, but by no means a guarantee. EOG drilled two wells on a 4 section lease we have in Loving County last year with flow back and first sales occurring in August 2017 and three more went on line this past February. Three more wells are scheduled to spud in June, if not before.
We still have not received a division order or a run check. It just so happens that, while we have a pretty substantial interest in all 4 sections, many other owners have very tiny ownership interests - there are, I am told, over 300 individuals with mineral interest in part or all of those 4 sections. So completing the division order title opinion is taking longer than anyone would have imagined, although EOG says we will most likely get the first check in May.
The good news is that, as the wells are extremely good producers, that first run check - when we get it - is going to be a whopper.
Thank you both for the info…We have 2 completed in Block 34, section 63, 1 that is due to complete in early May and one set to spud in June…anxiously awaiting new!
Is anyone with surface rights negotiating with Medallion Delaware Express Pipeline for an easement in Ward County? I am familiar with the University of Texas rates which are stated as minimums. I was wondering what rates were being consummated. Thanks in Advance for your thoughts!
Mr. Bryant, We granted an easement on our Ward County property to Medallion Delaware Express, LLC just last month at $180/rod after their initial offer of $120/rod. They were good to deal with and payment was quick. Best regards, Bob Dennis
Mr. Dennis,
Thank You for the information. Were those rates for a 10 year term or permanent easement? If a specified term: renewal price with CPI adjustment as well? The Univ of Texas also requires removal at termination (not that that happen anytime soon).
Thanks Again,
Charles
Got our 6th offer in just over a month to purchase our property in Sect 59, block 34 but this one had a different twist. KEW Drilling offered to buy a portion of the royalties from our current lease with Jagged Peak. Interestingly enough, Jagged Peak took over the lease from KEW 16 months ago. They also offered to buy the land, min rights etc, but the offer is less than a couple others. Does anyone have any advice about selling the royalty rights........my instinct tells me it's not a good idea....I would lose the potential for future profits. Any thoughts?
My father has a few small mineral rights interests in:
H&TC BLK 34 SEC 6
H&TC BLK 34 SEC 6 N/4 N/4
H&TC BLK 34 SEC 5
I am his legal guardian and have been receiving offers in the mail for his interests. It's not a whole lot of money, but he has numerous medical bills, so I may have to sell it for him one day. Are this mailed solicitations just vultures circling? Are any of the outfits better than others? My oil & gas knowledge is next to none. I appreciate any insight.
Morgan
Charles,
I will try to help you a bit as to your question on your father's mineral rights.
The area you have described has been a long producing shallow oil field area (since pre WWII) from the San Andres formation. Millions of BO produced and wells presently in their very late and marginal stages of production.
Over the past year, a few operators (including one - Four Corners) have been drilling deeper vertical wells below the San Andres and making some O&G completions. Nothing great (yet) but definitely opening up a potential new play below the old tapped out shallow production.
This new activity is probably the reason that the royalty buyers are now contacting you. I would say from my own experience (I get one unsolicited offer to purchase my S Tx minerals per week), these are all legitimate companies with $$$ to buy minerals. They will be making offers based on the PRESENT production and some multiple of that production (e.g. if you are getting an average of $100 per month from your royalty interest, they will offer 30 to 50 months of that rate - or $3000 to $5000). Many people will jump on this to get some money. The buyers are looking to pick up interests from individuals who are not up on what is happening as to new activity and/or are tired of only getting mini checks and/or who want a bigger one time pay day.
In any case, awareness is key. I would suggest that you get into the Tx RRC site and try to stay up on activity in your area. I will admit it is not the easiest website to navigate but it is "free" .
The attachment below if from DrillingInfo.com (a pay site) and shows sections 5 & 6 in Block 34. As you can see, a ton of drilling (all shallow San Andres) over these two square mile sections.
Good luck on this issue.
I suggest holding on to your mineral rights and never sell them. There are many entities who will take advantage of uninformed mineral rights owners by offering seemingly good money now, only to reap large profits when they flip the lease to someone else.
In portions of Ward, Reeves, Pecos and Winker counties, Jagged Peak has leased nearly 70,000 acres in their Whiskey River, Big Tex and Chochise developments where there are 937, 232 and 243 target locations respectively (Locations based on 880’ spacing and current acreage of approximately 70,000 net acres). This activity might be used as a gauge for activity near these developments not under lease.
For 2018, Jagged Peak has about 24 holes planned to hold the Whiskey River Development. In each of these developments, the current target zones are: 3 Bone Springs, Upper Wolfcamp A, Lower Wolfcamp A, Wolfcamp B.
In short, if you have mineral rights near/in these areas, it may behoove you to hold on to them since Jagged Peak has some big and aggressive plans for these developments. They know, as well as other companies, something mineral rights owners typically do not know.
Thanks for the info.
Charles,
I'd like to reinforce John's comment. My Uncle was a petroleum geologist for 50+ years, and along the way picked up small interests, often as partial payment for doing work for oil companies. Before he died, he told me: Never sell your interests unless you absolutely have to. If someone wants to buy them, it's because they know something you don't."
I inherited a whole bunch of old wells, dating back to the 1930's, in the O'Brien field. They don't pay anywhere near what they did a few years ago, but they keep on dribbling. And the recent requests I've also gotten to sell tells me that Rock Man is right on.
Regarding my Sept 23, 2017 question about my Blk 34, Sec 63 property not having any activity while the 2 year lease extension's time was about to run out: I spoke to Jagged Peak's land office which told me a well was begun early Jan, 2018 and 3 more scheduled to start drilling Feb through July. Clint Liles was spot on - patience! I thought folks would like some follow up info and I wish others would do the same more often.