J-B Oper. Co. request to "redefine Lower CV Zone 10,030' to 12,100'..."

Question: Why would Commissioner of Conservation grant to J-B Oper. Co., et al, (or any other O&G, E&P) a "redefining" of the Lower Cotton Valley Zone (Reservoir A)"...(or any other Zone, for that matter)...."in the Elm Grove Field"...(or any other field, for that matter)..."as being that gas/condensate bearing interval encountered between depths of 10,030 feet and 12,100 feet (electrical log measurements) in the J-W Oper. Co.-Cohort Energy et al. 22 No 1 Well, located in Section 22, T16N, R13W, Caddo Parish, La...

Along with 10 additional requests...including application to drill in these sections in the Hosston Zone/Res. A, CV Formation/Res. A, and Lower CV Zone/Res. A... and somewhere they include the kitchen sink, I think...
J-W, et al., is force pooling all sections shown on their "map," to include Sect. 17, 19, 20, and 21...as these sections contain J-W's "proposed unit wells."

Again, I ask, why the "redefining of the depths" of the Lower Cotton Valley Zone in this application to the C. of Conservation? I understand the intend of the land grab of the sections, I am not quite sure if I understand the depth change request... Dare I say (imo) that these "requests" are NOT geared toward improving the lot of mineral owners in these sections.

Thank you for your responses. I do appreciate every bit of info that I have learned from all you fellow "shalers."

The letters are coming folks. So I hope we are all prepared to see life moving at an even quicker pace around the HS.

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Permalink Reply by DrWAVeSport Cd1 on July 12, 2008 at 8:17
I agree Les B...

However...when you are being "force pooled," someone is getting
#$%@&@##...! There needs to be a clear understanding...across the board...as to how these depth clause changes will be applied/granted/and in doing so... A MINERAL OWNER/LANDOWNER SHOULD FIND HIMSELF/HERSELF IN A POSITION TO "GAIN GREATER ECONOMIC BENEFITS FROM HIS/HER INTEREST." ...Quoted from the Oklahoma Supreme Court ruling against American Quasar Petroleum Co. per "compulsory pooling" case (O'Neill vs. American Quasar Petroleum Co. Law Dig.; Vol/Issue 18:2; 1981.

We need clarification from the Office of Conservation/State of Louisiana.
Permalink Reply by DrWAVeSport Cd1 on July 12, 2008 at 8:33
Les B:

In addition..."commingling production," simplifications in accounting, measurement, etc. are all understandable...as long as the defining of these depths are still defined for the mineral owner as an asset to him/her...not as a deduction of benefits!!!!!
Permalink Reply by Bacon on July 13, 2008 at 0:35
Sorry to be so dense here, but I still have not seen a concise explanation of exactly why this is a bad thing. Understand that, to my uneducated O&G industry mind, it definitely looks kind of shady. Just wondering if anyone can cite an example of this occurring elsewhere and the what the ramifications were. Thanks.
Permalink Reply by Snake Stewart on July 13, 2008 at 1:31
What if depth clauses were in place to protect deeper zones in your lease ? Zones are reclassified and that deeper zone is included in now renamed area , thus you no longer have protection you signed for in original lease ? You now wouldn't be able to resign lease on much more expensive Haynesville Shale! Just a shot. May be off base but that is my thought .
Permalink Reply by Kassi on July 13, 2008 at 1:36
That is my thought to Snake. I am doing some research on the subject. In the meantime I sent some information to Vickie Welborn of the Shreveport Times and will be calling Jim Roberts of channel 3 next week. This web site is growing but does not reach nearly enough people to get this sneaky practice publicized like it needs to be.
Permalink Reply by Les Bamburg on July 13, 2008 at 6:02
SS, that was my take on the exposure also (ie a new lease with a Pugh clause in its primary term). This would allow a company to use a Cotton Valley well to HBP the Haynesville Shale mineral rights.
Permalink Reply by Les Bamburg on July 13, 2008 at 6:01
DWS, it would seem the Office of Conservation should request the company to demonstrate this redefinition has no negative impact to the lessors. Otherwise the company should use one of the alternative approaches (commingling production). It may require one of the land owners writing a letter to the Office of Conservation.
Permalink Reply by Greyshades on July 12, 2008 at 18:05
Les - If they want to do downhole combinations, they can just separately unitize and get a downhole combination order. They've been doing it for years in Elm Grove with the HOSS, LCV and CV.
Permalink Reply by sesport on July 13, 2008 at 9:22
PHK letter.pdfThanks for sharing that. If I can, I'll try to attach the one I found.
Permalink Reply by doughboy on July 13, 2008 at 13:50
I went and read the attachments. This is heavy reading indeed but even a dummy like me can see this is no good for the landowners. This is nothing more than an attempt by J-W Operating to circumvent established practices to save themselves a ton of money in high lease payments and higher royalty payments. They want to run with the big dogs (Chesapeake, Petrohawk, Encanna, etc) but don't have the deep pockets. So in turn they are trying to resort to shady and unethical practices to keep themselves in the hunt.

I live nowhere near these sections involved in this hearing request but even I know that it is in my best interest to fight against such tactics. It could very well be at my doorstep tomorrow. Remember, this is Louisiana and things that could in no way happen in other states, will fit right in as business as usual here. If this hearing actually takes place, we need to be represented there and in NUMBERS. I have already sent my fax and email expressing my displeasure to Commissioner Welsh. It must be made clear to our government, J-W Operating, and all other O/G parties that we will not sit idly by and be pushed aside without a legal battle. You can reach Commissioner Jim Welsh at the following:

Office 225-342-5500
Fax 225-342-3705
e mail jimw@dnr.state.la.us

Thanks--- doughboy
Permalink Reply by DrWAVeSport Cd1 on July 14, 2008 at 8:41
Dear Haynesville Shalers:

I have been getting this sneaky/uneasy feeling that because the O&G/field guys are not "responding" in kind (as they usually do...immediately) to this topic, we need to have a complete explanation as to same subject from the Office of Conservation ASAP. No O&G/E&P company rep has responded with any type of clear explanation????
(And, they always do respond in this forum.) Why stay away from/off this subject?

I am sending my fax/cover letter/backup documentation per "depth" change requests to James H. Welsh this 7/14/08 p.m. How does this affect the lessor per $$$, or does this affect the lessor; how does this affect those HBP in said fields; how does this affect force pooled acreage; and...what is the purpose/benefit/reasoning behind granting these depth clause changes (granting them to the operators). I want a CLEAR AND COMPLETE DEFINITION.

The Office of Conservation's Fax # is 225-342-3705. Please send a cover letter (short but to the point) and request same. You can call 225-342-5540 and request a thorough explanation...if anyone can do that.

The Canadian equivalent to our Office of Conservation offers its expectations of the O&G companies doing business in Canada by requiring "CLEAR..REGULATIONS, GUIDELINES AND CLEAR INTERPRETATIONS that are SIMPLE and EASY TO UNDERSTAND and to ADMINISTER."

No O&G or E&P or "J-B" type drilling operation is requesting this depth change request for the thrill of doing so.

I would think (speculation on my part) that the benefit in $$$$ is strictly meant to be assigned to the producer, and that the mineral lessor would be out any additional/increases in % of $$$$ except for what had originally been coming out of the LCV zone, etc. That (to me) means having larger gain in well production, thereby HOLDING the lessor to the same leasing contract terms that held the lessor under the LCV zone contract...probably signed before knowledge of the "Haynesville Shale" zone. Again...I am truly guessing...not good, when trying to discuss this area.

Let's not let this one fall under the carpet!!! We all need answers to this one!!!!

DrWAVeSport 7/14/08 (I have had vacationing company at my home all week...so I do apologize for not returning before now.) The immediacy by which info is shared with fellow shalers on this website is amazing and I think truly appreciated by all.

Thanks in advance to everyone.
Permalink Reply by James CD1 on July 14, 2008 at 11:01
I sent my email today. Anything else I can do?

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