Shallow Well information
I am sure this has been brought up before with all the savvy oil men on this site but please direct me to the area where it is or give me some of the VAST KNOWLEDGE most of you seem to have..
What besides a lease is there in place to stop an oil company coming to your property or section for that matter and drilling a shallow well and capping it and labeling it held for production knowing that from now on they can come back at leisure and finish drilling to depth of Haynesville or any other and then producing in 10 or 20 years? I do not believe there is anything to keep this from happening but please correct me if I am wrong. If I'm not than we are going to see many people having their mineral rights locked up and receiving $1.00 per year per acre for an awfully long time. I myself should have known better because we use to do this offshore to tie up leases. “Thinking that the landman was honest and decent, you know the type young guy who is working with ours and his best interest in mind??” Yea, well now we all know better and will most likely pay for this and more mistakes for many years to come as well as our children.
What besides a lease is there in place to stop an oil company coming to your property or section for that matter and drilling a shallow well and capping it and labeling it held for production knowing that from now on they can come back at leisure and finish drilling to depth of Haynesville or any other and then producing in 10 or 20 years? I do not believe there is anything to keep this from happening but please correct me if I am wrong. If I'm not than we are going to see many people having their mineral rights locked up and receiving $1.00 per year per acre for an awfully long time. I myself should have known better because we use to do this offshore to tie up leases. “Thinking that the landman was honest and decent, you know the type young guy who is working with ours and his best interest in mind??” Yea, well now we all know better and will most likely pay for this and more mistakes for many years to come as well as our children.
Views: 115
Replies to This Discussion
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Permalink Reply by James CD1 on
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Jerry, I sure hope someone will answer your question soon!! And also mine-what is a Alt. well and for what
purpose?
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Permalink Reply by Two Dogs, Pirate on -
James an alternate well is another well being drilled in the unit to help effectively drain the unit. I guess it could mean something else but that is my take on what you are asking.
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Permalink Reply by Two Dogs, Pirate on
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I don't think what you talking about would hold your minerals for the periods of time you are talking about. In Louisiana any atempt to hold minerals without production for longer than ten years would fly in the face of LA law.
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Permalink Reply by Two Dogs, Pirate on
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I have heard many times from people saying that they drilled this well years ago and hit and capped the well to come back to it at some future date. It don't work that way, you lose the lease at the end of the primary term. If you are talking about shut-in, you need a reason to shut the well in, like waiting on pipeline or working on the well or some other reason stated in the lease.
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Permalink Reply by Jerry on
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Ok, now if I am getting this right this is what we can be in for:
A company comes to your section and drills a well. Nothing too expensive small rig and drills several hundred or maybe couple of thousand feet and sets surface casing. There is no pipeline within 5 miles of the well. One is planned for future, years in the future say 8 years. That makes this legal. Even though the well will have to be drilled to a deeper depth before it can produce. Am I correct in saying that you can expect to receive 1 dollar per acre per year as your contract states for the time until the well is producing up to a time of 10 years?
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Permalink Reply by Two Dogs, Pirate on
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No, I don't think that story would float. First off a couple of thousand foot well want hold too much acerage, nothing near like a section, in the first place. Now don't get me wrong there are crooks out there that may try to put this BS over on you. If you are being held by something like this you need to talk to a good oil & gas lawyer. My advice is to never sign a OGML without a cut off on the term of a shut-in. The shut-in clause can be busted in lots of cases.
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Ok thanks for the information. Seems that in my past, drilling company I worked for, we drilled on leases in GOM to hold lease for extended time. We called them post holes. Yes they were 10,000 feet but that at the time was a post hole compared to depth we were drilling.
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Permalink Reply by Two Dogs, Pirate on
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The deep wells hold more acerage, and didn't you say this was offshore? Most landmen don't know jack about offshore, there is only one lease to buy and the Lessor has got the nuclear bombs to throw back at you.
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Yes you are so right; Looking back is way too easy. I guess like many any chance was better than none. I as well as any of my family who I can convince will never sign another lease without a very good attorney looking over it.
Thank you for the information and help.
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Permalink Reply by Two Dogs, Pirate on
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If you are being held by some BS deal then that is the way to go, you may can bust the deal. What Parish is your property located?
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No two dogs I am not in this situation yet but I am in the last two years of extension and have no drilling taking place yet. I just asked because I feel in the future alot of people are either going to have a lease expire or there are going to be some of the above mentioned to hold leases until big rigs can come in and drill. It would be underhanded but a simple solution to hold some high dollar leases for a few extra years. And no I am not giving any ideas to any one who hasn't already thought this out.
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