Terri what is your full legal ?
Pressures are falling off a cliff in the area, a few operators stopped at 2,500 TD and pulled off then let lease go back to CO. Grover Big Bonus Acreage is gone. I think market is $300 to $500 and D and J Sand development is where the smaller operator will lease. Niobrara getting very thick and HZ drilling is down to 10K before turn, and the costs are rocketing up over $7M to completion.
I can be contacted at [email protected] for info on my mineral rights. Thanks Scott Gray
Jason, what do you mean, “Pressures are falling off” etc. Could you explain your post a little please?
Hi Scott - I’m a landman working in Weld County - would be happy to visit with you a little bit - let me know if you want to exchange contact info
We want to obtain a lease for mineral rights in Weld county. Does anyone know of good companies looking for rights in TWP 9 N?
Hi Terri,
I represent a company buying leases/minerals in Weld - they’re a good company and I’d be happy to visit with you about them - let me know if you’d like to speak further and we’ll exchange contact info - thanks
Hanna, the break even point is going to be determined by how much it costs to get the well to the producing stage, leasing cost, legal/landman, tangible and intangible drilling costs and how much the operator nets after operations, legal, royalty and the taxes we all pay and other considerations such as marketing costs. If an operator drills a well that will never recover the drilling cost, they do not necessarily cap it immediately. As long as a well can generate positive cash flow month to month, it’s already there, might as well produce it until it can’t so you recover at least some of your costs and hold the acres by production, possibly for decades. The value of the acres may go up in the future and a new more productive well may be drilled. This is happening to many people who have had a verticle well at 1/8 royalty that hasn’t produced much for a generation, they are getting a new horizontal well and are stuck with the old 1/8 royalty. It’s a frequent story here on the fourms.
Our well is the DRAKE well…there are two wells on the same pad, but only one of them is ours. It is the 14 - 15 D or some such. It is in Section 14, 7N 67W. I have seen the production reports, such as they are (behind) and it seems like it is 3-400 barrels…per month I suspect, but I cannot be sure. We are in process of getting leases signed etc.
Terri,
I am an in house landman employed by an operating company located in Denver. We have a proven record in the Wattenberg Field having operated many productive wells. We are always looking for leases to drill on. Thanks
Hanna, I will take a stab at your question because nobody else is answering. If you drill a bunch of wells in a field the natural pressure will decline and the wells will not naturally flow as much oil as they would have if drilled when there were fewer wells, because the wells will flow for a shorter time the oil will have to be pumped and the time til the well is paid for will lengthen. I do not believe that all the oil is gone just because the pressure has lowered although it could be somewhat depleted. Operators like a faster return on their money, who doesn’t ? I doubt that an area is going to be abandoned in droves because it takes a year or two longer to break even unless the area was marginal to begin with.
Thank you rw…so let me ask, what do oil people consider to be a break even point in terms of production? And if production is below that, do they just then cap them off?
Many people do not realize how cheap it can be to operate a well. There are some horror stories but I think most have very little upkeep or there wouldn’t be so many low producing wells and there are a huge amount of wells in the US that produce less than 10 barrels a day.
Woops typo in last post there, Jake did about 88,000 Barrels it’s first year, If you want to pm me your well name i can look it up and tell you. The only thing i can say JW is an 1/8th in a 30 year old D or J sand well is nowhere near what and 1/8th of a Niobrarra Horizontal Well will do. I don’t see anything wrong with going after HBP leasehold and moving up to different formation. This is a far more proven method and going into existing well bores and cut panels and drill baby drill! The Critter Creek 02-03H well next to the Jake did 130,000 barrels first year on track for 100,000 barrels it second year so the more they drill the better the HZ and Fracs are getting. FYI the Niobrara is a psuedo shale really a Chalk and those boys are fracing with no chemicals just Water!!! Take that EPA!!!
Hi Hanna Mr. Kennedy had a pretty good explanation of pressures. We have so much oil and gas in Colorado its mind boggling and we are developing and finding better more efficient ways to extract the hydrocarbons so don’t worry to much there is an operator for every formation and for all types of drilling. Because Oil is $100 per barrel even a 2 barrel a day well is economically viable, although gas is a different story it to can be produced cheaply so I know operators making millions on $2 gas. Most every well drilled has a model to be paid back in less then 18 months, look at the Jake well for example which is now not even that impressive at 55 barrels produced its first year. There are wells nearby the Jake well that have done 30% better! Sometimes wells disappoint but taking a loss is not so bad either in the oil patch. I have looked at thousands of wells in my time so far in the energy business and I can tell you I have never seen a well dry up, and I mean never.
Thanks rw…Jason, Jake well only produces 55 barrels in the whole year?? I thought it produced hundreds of barrels a day;/ I’m not sure how good, or bad our well is…I don’t know if the report online is barrels per day or month;/
Lynn
i’m a novice trying to learn the basics myself. happen to have a division order basics tutorial handy;
http://www.americanroyaltycouncil.com/Portals/_default/Skins/ARC/tu…
Lynn,
A division order is how you get paid your mineral rights percentage. Commonly Operators will have whomever buys there oil production send checks directly to the royalty owners. It looks like this is the case with your lease. This is good thing. Don’t waste your money on an attorney he will tell you same thing i just did but charge you $300 an hour to review docs that oil operators have been using for 100 years or more now.
We currently have producing oil interests in weld county …Another firm just sent us a letter called “Divison Order instruction” asking us to sign with a Sunoco Partners LP…DCP Midstream is also involved. Is anyone else receiving this correspondence, or have an idea what a division order is? Perhaps we need to secure an attorney that specializes in these cases…
I have leased minerals on a section that has a well that has been producing since December. I have not received a division order yet but expect one soon. When I start receiving payment will I get paid for all the oil produced since December? While the oil company is getting all the title and deed searches and other paperwork in order to distribute division orders are they still pumping oil and storing it? Selling it? Not producing? Different articles I’ve read have me a little confused.