Replies to This Discussion

Permalink Reply by sesport on April 5, 2009 at 3:19

AW - Checked it out, looks good, am looking into it further. Will you keep GHS posted about the letter count & responses?
Thanks - sesport :0)

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Permalink Reply by Andrew Walker on April 5, 2009 at 3:35

I will sesport.....thanks for the reply!

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Permalink Reply by Andrew Walker on April 5, 2009 at 4:30

Jay:

You have obviously not read my article. I'm not proposing one well per unit. I'm proposing a new law that will allow these infills....but there must be additional provisions to balance the infills among the various units. The state should guarantee equal protection as much as practical. If not corrected we will have situations where royalty owners in one section may benefit from 8 horizontal wells while his next door neighbor, in the next unit gets only a small check each month from one vertical well. Understand my point?

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Permalink Reply by Andrew Walker on April 5, 2009 at 4:35

by the way, my memory is not clear...it may have been you, "ShaleGeo Jay" that disagreed with me previously and not Jay Murrell....I just can't be sure...sorry for the confusion

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Permalink Reply by Andrew Walker on April 5, 2009 at 5:07

yes the train left the station a long time ago. 1940 to be exact. And the LAW still stands: one well per unit. You and I are actually in the same boat. We want 640 acre units that will allow for these infills. We therefore need a new law that will allow this and provide equal protection for everyone. In my plan, which is towards the back of the article at www.fairdrilling .com, the operator would only be able to "hold" the developed portion of his units over time. In your situation that "crappy vertical" would not be able to "hold" that entire half of the unit. The undeveloped portion would be required to be released back to you at some point in the future. The bottom line is that operators have been given too much discretion. The current drilling is in violation of our current law and allows - even promotes - arbitrary discrimination.

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Permalink Reply by Andrew Walker on April 5, 2009 at 5:10

Just to let you know, Jay...I'll be checking back to this site later this evening. It's April. I have seeds to plant.

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Permalink Reply by Andrew Walker on April 5, 2009 at 15:41

Thanks Jay.........inch by inch, row by row, someone bless these seeds I sow!

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Permalink Reply by Randy on April 5, 2009 at 7:36

As if by magic, I don't think the things you are mentioning are that bad KB. I agree with the majority of them. I'm not too sure about the legacy lease part, I think that is still much better than losing your minerals forever by reservation, for example. I know it's apples and oranges, but it could be worse is my point.

I think if you could get 'paying quantities' defined then that would be an enormous step in the right direction. There have been more abuses of that phrase than I can count.

The world seems to be going to a more transparent accounting structure, and that can only help all of us in the end.

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Permalink Reply by Grillin' - MmmMmm on April 5, 2009 at 8:36

Tell me again what's wrong with the term "paying quantities"? I'm not sure I have a hard time understanding it, or what could be clearer? But I'm probably reading into it the results of law suits over the years. It appears that most folks understand this clause to be a well in paying quantities equals a well that is making a profit over and above lease operating expenses, taxes, transportation costs, etc.

Now, getting more specific than that means we'll have some legislators trying to define these terms. That could be fun to watch as most of these guys are lawyers and don't really have a clue how to run a profitable oil and gas biz. But if better definition makes everyone happen, I can go for it. HOWEVER, I wouldn't be in support if we have the legislators or the Conservation Board dictating how a field must be developed. Like the question of horizontal wells. I feel this is something best left to the investor company. And if a company has a history/reputation of mis-applying technology for whatever reason, then they should not be given a lease. I certainly wouldn't lease to Joe Bob's oil/gas company if I knew he historically drilled el cheapo wells just to HBP folks. But once I leased to him, I'd have to live with it. Actually, I'd lease to myself and drill what I want! Or farm it out and dictate via the farmout that the company drill x horizontal wells or lose the farm out.

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Permalink Reply by Andrew Walker on April 5, 2009 at 15:35

Here's a quick "edge" for you KB. In my plan "you're gonna get HBP" in a 640 acre unit as you have stated...but it would not necessarily be forever. If that unit's production became deficient in comparison to the production of surrounding units at some point in the future, then the operator would be required to drill the undeveloped portion of the deficient unit...or it would be released back to the mineral owners ..."If you don't use it, you lose it!" (by the way you have lots of great ideas)

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Permalink Reply by intrepid on April 6, 2009 at 5:05

Andrew Walker,
Being in Texas I don't think I would have any sway with Jindal. However, from what I've seen of your proposal it lookslike a good idea and would seem to help the landowner get their minerals developed.

Permalink Reply by Catfish on April 6, 2009 at 1:15

There is no doubt the laws favor the O&G and change may be needed. I do believe due to the amount of gas in the HS they will develop it in a timely matter as market conditions allow. Remember this is an unconventional play.

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