Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 16, 2010 at 4:37

I believe that the northern boundaries on these proposed units are running along the boundary of BAFB.

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Permalink Reply by Skip Peel - Mineral Consultant on June 16, 2010 at 5:11

I believe that this application involves dissolving existing HA units to the south in order to accommodate these proposed units. I would appear that Encana would also have to dissolve their unit HA RA SUPP and reapply to include the southern half of Section 20 as SUPP was formed as a standard governmental section of 640 acres for Section 29.

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Permalink Reply by Sligo on June 17, 2010 at 1:17

ITS ALL ABOUT MONEY!! In the notice I have, HA RA SUPP (section 29/17/12) is desolved and added to the lower half of section 20 to form a new 960 acre HA RA SUPP. Encana claims " Basically, Encana could not negotiate a lease with the BLM--the Air Force did not want anyone drilling on or under the base." Why can't Encana get a lease? There are other Haynesville Shale units on Barksdale, sections 1, 2, 3, 4, 9, 10, 11 and 12 in 17W 12N.
Of the 5120 acres in the existing units, Encana is not able to secure a lease on 560 acres or about the equivalent of 1 unit, yet it is the intent of Encana to only form 5 units and desolve 8.
Creating these larger units would dilute the royalty payments to the mineral owners. Drilling 5 wells instead of 8 would save Encana $30 Million.

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Permalink Reply by Skip Peel - Mineral Consultant on June 17, 2010 at 2:25

Sligo, the existing HA RA SUPP includes three, non-contiguous sections? S29, 17 & 12? It would be helpful to have the unit designations and field or fields for the 17N -12W sections that you mention. I understand your concern but would like to point out that though the proportional share of unit production is reduced for all mineral interests, the larger units qualify for more wells. I'd like to see Encana's development plan for these proposed units to see if they plan longer laterals allowed by the new sizes.

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Permalink Reply by Sligo on June 17, 2010 at 14:55

HA RA SUPP is only 1 section, and that is Section 29 township 17 North range 12 West, in Elm Grove Field. My point is: Encana wants to form a unit of 960 acres and then drills 1 well. The royalties will be less per acre because of the size of the unit. After the Units are approved by the Office of Conservation, Encana can drill 1 well per unit and hold the total leased acreage in perpetuity. On the other hand, if the units are smaller, Encana will have to drill more wells to hold the leased acreage. This will result in larger royalty checks for the mineral owner. As a mineral owner, I want more of my money now and not when Encana decides to drill. As for the "development plan" there is nothing that would require Encana to follow their plan after the units are formed. I don't think Encana would sign a binding agreement to drill all the wells that would be allowed for this unit within a designated time period. Do YOU?

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Permalink Reply by Bobi Carr ("parker") on June 18, 2010 at 2:29

Sligo,

Surely, there is some mistake, Audubon (Encana's broker) told me that they had leased BAFB and that they got the same terms that everyone else was getting.

You don't think they by chance were misleading some of us. Say it ain't so.

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Permalink Reply by Sligo on June 21, 2010 at 15:40

The quote about Barksdale not leasing is from an email I received form Encana.

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Permalink Reply by Bobi Carr ("parker") on June 21, 2010 at 16:50

Sligo,

My grandmother told me eons ago not to trust men when they said “trust me”. She said they would say ANYTHING to get what they want. SILLY ME. I thought she was talking about something else. I didn’t know this applied to landmen. I thought they were bound by laws similar to real estate agents that it would come back and bite them if they were misleading.

Yes, Audubon told me that they had leased BAFB for their client (Encana), but in the last 3 years I have discovered it just ain’t so. They also said they had leased the Gray property. Which, to my great surprise was also not true.

Hope you had a better experience.

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Permalink Reply by Jim on June 17, 2010 at 9:15

Will attending the conference and voicing objections be worthwhile, or is it a done deal? Probably already been decided, but I am going to try. I agree with Sligo in that there are other units on the Base, what is Encana's problem.

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Permalink Reply by Bobi Carr ("parker") on June 16, 2010 at 8:22

Skip,

You didn't by chance here that from an old goat, did you?

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Permalink Reply by Skip Peel - Mineral Consultant on June 16, 2010 at 8:32

Why yes I did parker, eh I mean Bobi LOL! Obviously no one in the southern half of Section 20 is reading this thread as I think that is the more interesting development associated with this application. A stranded lower half section can not be drilled north and south and accommodate but half the normal lateral length. And unless there is a fault or some other reason to drill east and west (for 4 wells), Section 20 would be better off in a 960 acre unit with 29. But then again we know how some members feel about that.

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Permalink Reply by Skip Peel - Mineral Consultant on June 16, 2010 at 8:51

Haven't heard anything of late. I wonder if the billboards are still up.

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