Can a O&G company drill on land that they do not have leased to get to land that they do?
We have land in two section in NW LA. Different O&G companys have them leased. The company that has the southern section is currently drilling a HS starting 200 feet into the northern section. We are told that this is so they can get a better drilling angle. There is no reason such as wetland restriction, that would keep this company from drilling in the section that is leased by them. So the well head or inital drilling point will be in a section of land that they do not have leased, and then they will drill down to the HS and then turn and go under land that they have leased. But the gas will have to be sold from the well head that on land that is not leased by them. I understand that the property owner is ok with this since they got the property damage money, but can they make decisions that effect my meneral rights like this? And how can the O&G company sale gas from a well head that is located on a section of land that they do not have leased? If this is legal why don't we see it more often, or is it illegal?
Views: 50
Replies to This Discussion
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Permalink Reply by Bobi Carr ("parker") on
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Lorrie,
Look at the discussion about Back Build Servitude. It is discussing the same issue.
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Permalink Reply by Mac Davis on
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As long as the "perforations" are all within one section, the surface well could be 10 miles away if they had permission from the property owners along the way.
"Perforations" are the places where there are holes in the pipe that allow gas to enter the well. All the gas coming out at the well head is "known" to be coming from that one section of land.
(Slightly simplified and exaggerated, but I think the concept is correct.)
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Permalink Reply by Les Bamburg on -
Lorrie, it happens all the time and yes it is legal. Certain operators are using this approach to maximize the length of the perforated lateral within the unit being produced. This is beneficial to mineral owners since it helps maximize the recovery of reserves per well. It may also allow the well to have a slighty higher initial rate but there are numerous other factors that also effect the initial rate.
I am not clear on your concern since It appears from your description that your mineral rights are not impacted.
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Permalink Reply by J.J.Jones on
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Les, please set me straight on this. Let's just say a well was drilled in section 25 and the horizonal went into section 36 where the perforations are located. I was under the inpression the folks that owned the mineral's in section 36 were the one's to receive the royalties. Is this not correct?
JJ Jones
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Permalink Reply by Les Bamburg on
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JJ, that is exactly correct. In your example by having the surface location in Section 25, the well can have the maximum allowable perforated horizontal lateral in Section 36 of 4620 ft (5280 - 2 * 330). This would not be possible if the surface location was in Section 36.
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Permalink Reply by Mac Davis on
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Les, is there an additional factor that makes the initial rate higher, or is it just the longer length of the perforated lateral?
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Permalink Reply by Les Bamburg on
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Mac, lateral length is a key factor but others include:
Frac Design - number of frac stages, perf spacing/clusters, type proppant, lbs of proppant, etc
Frac Execution
Rock Properties - clay content, porosity, permiability, etc
Formation Depth (ie reservoir pressure)
Initial Flowback Process/Procedure
Downstream Infrastructure Capacity
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