Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on July 8, 2009 at 13:56

Thanks, Bud. Fore warned is fore armed. Emphasis on "only if there is a specific request filed by 16 July by an "interested party".

Permalink Reply by mary on August 2, 2009 at 15:56

There is interest but the firm handling the pre-application notice discourages land owners from participation, stating that attending the hearing in BR is the way to express any concerns that you might have. I simply want to know why Petrohawk needs such a large unit when max. 80 acres are needed for drainage? A larger unit will dilute the interest of the mineral holder, so I can't imagine why anyone would accept this. Welsh stated in his recent interview that these larger units are only for areas along the Tx border and an area around Toledo Bend. Does he think that this is acceptable? This is discrimination.

Permalink Reply by Skip Peel - Mineral Consultant on August 2, 2009 at 16:21

mary. I disagree with "the firm" concerning the pre-application notice. However your fear of, and objection to, the larger than a section unit application is misplaced IMO. Without going into a drawn out explanation, your comment as to 80 acre well spacing is the main question. And regardless of the total acreage included in a drilling & production unit, the well spacing still applies. In other words, a larger unit does not dilute your interest as long as the maximum allowable wells are drilled. A 640 acre "standard" section unit qualifies for 8 wells. And a section and a half (~960 acre unit) qualifies for 12. I believe that Section 31 is a partial section and Section 32 , a full section. The combination of the two into one D&P unit is usual and acceptable practice (along the TX. state line). If you wish to oppose the application you should be prepared to engage the services of an experienced O&G attorney and a petroleum geologist. Otherwise you are tilting at windmills.

Permalink Reply by mary on August 6, 2009 at 13:01

Peel, you said... "In other words, a larger unit does not dilute your interest as long as the maximum allowable wells are drilled."
So I guess if I stomp my feet and demand that the maximum number of wells are drilled, I will get my wish. I don't think so.

Peel said "The combination of the two into one D&P unit is usual and acceptable practice (along the TX. state line)."

Usual and acceptable in what circle? It is being done as we speak, but was not usual until the HS was discovered and o/g companies quietly started making the requests. I certainly don't consider it acceptable. Do you own land? What size is your section? Have you been told that you must accept a larger unit? What geological justification can you offer for such large units?

Permalink Reply by Skip Peel - Mineral Consultant on August 6, 2009 at 13:21

mary. You can't influence operators to drill the maximum allowable wells. Only the economics of the Play can do that. And the operators are investing their development dollars to make a profit. I think they will drill every single well that the LA. DNR/LOC will permit them to drill in a unit. Units greater than a section are the result of the evolution of horizontal drilling. If not for the industry's ability to drill and produce an extended lateral wellbore, the partial sections under Toledo Bend (or next to the state line) would not be drilled (for HA production). And the land/mineral owners would not have their minerals turned into royalty income.

Permalink Reply by mary on August 8, 2009 at 12:25

The Toledo Bend area is different because it includes a large body of water. There may have been a reason for the larger unit request. The sections on the Texas border are ample size to become a unit without involving other sections. I have not seen any evidence to the contrary.