Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on April 8, 2011 at 11:56

Under the LA. Mineral Code providing for Force Pooling, all lessees within the unit boundary, other than the unit operator, would be Working Interest owners in the unit and bear their proportional share of the well costs or be subject to penalties.  Working Interest owners must pay their percentage interest of all AFE's (Authorization For Expenditure - development related costs) in order to maintain their ownership interest and may choose to have the operator sell their oil/gas or they may market their proportional share of production.

Permalink Reply by P.G. on April 8, 2011 at 12:28

How would a driller profit from Working interest owners?

Permalink Reply by Skip Peel - Mineral Consultant on April 8, 2011 at 12:37

They all share the cost of the well.  And the production. Very few HA units/wells have an operator that is the sole owner of all the leases in a section/unit.  The vast majority of HA wells are drilled by an operator with the participation of one or more Working Interest owners.

Permalink Reply by P.G. on April 8, 2011 at 14:21

So say CHK drills the well but my lessee is a Working Interest owner, I would be dealing with my lessee and not CHK as far as the royalty and expenses are concerned?

Permalink Reply by Skip Peel - Mineral Consultant on April 8, 2011 at 15:06

As far as distributing royalty, your lessee can decide to pay the royalty or have CHK do so.  As has been discussed numerous times on the site, EnCana and SWEPI as 50/50 joint venture partners pay one half each in many of their units.  Those lessors get a check from each.  Regardless of whether your lessee or the operator of the unit pays the royalty, all Working Interests pay their proportional share of the costs.  In your example, if your lessee has CHK pay your royalties you would experience the same deductions as those mineral owners leased to CHK unless you had an iron clad lease clause that exempted your royalty from those deductions.

Permalink Reply by P.G. on April 13, 2011 at 4:37

Well phooey!

They are going to exercise their option!

But perhaps that may mean they are optimistic about a well being drilled in the next two years...Just wish I had another shot at getting better terms..

Permalink Reply by Skip Peel - Mineral Consultant on April 13, 2011 at 8:04

The far west 17N and 18N townships remain the exception to the "north of I-20" rule.  I think it likely that you will get a well in the next 12 months.  Good Luck.

Permalink Reply by P.G. on April 14, 2011 at 6:09

I'm in section 12-17n..

There's a well permitted in sec 11 next to us but I don't think they've done anything with it.. They ran a pipeline (looked like a 12 inch pipe) into our section last year but capped it off..  plus unitized us..

Permalink Reply by P.G. on July 2, 2011 at 4:10

Looking on Sonris, I see the well permit in sec 11-17n-15w has expired and is not on the map any more...

Looks like it might be awhile before they will drill in my section  if ever..huh? I'm in sec 12...

Permalink Reply by Gale Bagley on July 18, 2011 at 12:13

P.G.

I am in 14 17N 15W and they just completd a well in 14 out of Sec. 23.

A lot of wells being drilled in lower part of 17N 15W.

Sec. 23 22 21 20 19 14 30 31 if I am reading Sonris right.

The well in 14 was pretty good 10904 mmcfd

GB

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