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Permalink Reply by Skip Peel - Mineral Consultant yesterday

Thanks for the detail on the accuracy of tracers.  In regard to the example field orders you posted, I don't think the mention of a lateral no closer than 330' from a unit boundary comes from state regulations.  Those field orders are produced by the law firms representing the operators and use boiler plate language that they have established.  I'll have to go back and review 29-E to see the language regarding setbacks.  I appreciate your willingness to share your knowledge on this topic.

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Permalink Reply by Skip Peel - Mineral Consultant yesterday

Statewide Order 29-E mentions the 330' setback requirement in several specific instances all of which are related to conventional wells for oil and gas.  Mineral trespass being a concern and reason for litigation, it is not surprising that the old world of conventional E&P was looking to regulate well locations where porosity and permeability allowed for drainage over a significant area.  As with many state regulations, there are exceptions to the rules laid out.  Here is a cut-and-paste from what I think is the appropriate statute.  It is an exception for waste.

La. Admin. Code tit. 43 § XIX-1907

Current through Register Vol. 50, No. 9, September 20, 2024

Section XIX-1907 – Exceptions A.

5. In addition to the exceptions provided for in §1907. A 1-4 hereof, the commissioner may, without additional public hearing, grant an exception to the provisions of this order in any case where the granting of such an exception appears to be necessary to prevent waste, to prevent inequity or loss of property rights. Such an exception shall be considered and granted under this Paragraph only when the applicant shall have furnished the following data and evidence through the district manager.
6. A letter setting forth all pertinent facts and reasons why the granting of the exception is necessary.
7. A formal application for permit to drill-Form MD-10-R.
8. An ownership map as required by the provisions of §1905. A.5 a-c hereof.
9. A written certificate that copies of the letter request provided for in §1907. A.5.a hereof and of the ownership map have been sent to each lease owner of tract offsetting or in the vicinity of the proposed well.

 

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Permalink Reply by Skip Peel - Mineral Consultant yesterday

The following plat is from a GEP Haynesville II alternate well application.  It includes an H well that is located squarely on the line between sections 2 and 3 -11N-12W.  No set back.  If you would like to review the entire application, it is Docket 24-306.  There is currently no field order in the database under that docket number and I'm trying to track that down.

GEPH%20II%20ALT%20WELL%20ON%20SECTION%20LINE%20APP.pdf

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Permalink Reply by Ryan Howrish yesterday

I think this is great for everyone (operators, mineral owners, state).  If you look at the existing development map, the unit wells in Sec 2&3 are drilled ~1000ft off the section/unit boundary.  Generally speaking, HV well spacing is ~1000ft.  With the 330ft offset from a unit boundary, it is unlikely another well would ever be drilled between the two existing wells in each unit. This alleviates that with a well right on the unit boundary.  

I will be interested to see how the allocation of that well works.  I would guess 50/50.

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Permalink Reply by Skip Peel - Mineral Consultant yesterday

Perhaps a precedent for future wells.  I would agree with the 50/50 allocation.  It would be hard for any mineral interest to argue over allocation when getting more mcfs on their royalty statement.  I'll place a note in my tracking spreadsheet so we know when a permit to drill is issued but that may be some time in the future.  As we have mentioned, field orders for alternate unit wells are effective indefinitely but have no time requirement to be drilled.  Now the question is, will more operators seek exceptional locations that mimic this one?

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Permalink Reply by w.r. frank 15 hours ago

It says 50/50 in Application.

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Permalink Reply by Skip Peel - Mineral Consultant 15 hours ago

Yes but the application is not official.  First we need to see a field order evidencing approval of the application as submitted.  I fully expect that the application has been approved but SONRIS has an extended lag time in entering data.   I've put a note in my tracking spreadsheet and will post when GEP Haynesville II gets a permit to drill.  Once the well is drilled and reported complete there should be an as drilled report that shows the split as 50/50.

Permalink Reply by Ryan Howrish yesterday

I think this is a great question to ask. Keep pushing it. It can be very meaningful for all of the stakeholders.  We should always ask questions about how we can do things differently moving forward. 

I have been involved with a few commission hearings on the Texas side of the border dealing with waste, and there is not always a clear-cut answer.

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