We have an old WI in an old well on 240 acres. A producer is spudding a 16000 ft horizontal well in Eddy County, NM and we need to declare if we will particpate or be a non-participant. I’ve asked for pro forma or other investment info that they based their decision on and they aren’t sharing. What information rights do we have in this situation? One would think that a projection in addition to the current budget would not be unreasonable, similar to common private investments and securities. Thank you!
You aren’t entitled to their proprietary information. You are entitled to the estimated costs to drill & complete the well.
1 Like
You should ask for the AFE, Authorization for Expenditure. You can ask the operator what your percentage of costs would be for the new well based upon the new spacing unit. Likely different from your previous well since the spacing is different. If you have a copy of the JIB (Joint Interest Billing) agreement from the previous well, that would be good to put in your files. Ask the operator if the terms are identical or going to be different.
2 Likes
I have the AFE and proposed JOA. I’ll ask for the prior JIB, though it was from a previous operator, so who knows if I’ll get a copy.
Also considering selling it outright or selling while retaining an ORRI. May be easier as you’ve pointed out in the past that participation is not for the faint of heart. Thank you!
This topic was automatically closed after 90 days. New replies are no longer allowed.