I was wondering if anyone could help me. I have a Natural Gas well in the Ozark Highlands Exploratory Unit. We signed a lease for five years wich is shut in afterwards. The well has now been sitting for seven years with no activity. South West Energy is the Lessee. I understand that the Unit is a massive project, about 182,689 acres. We have the mineral rights to 80 acres wich the well is on. Southwest Energy claims that they are experiencing delays for the pipeline that is to be attached to the well. My thoughts....Seven years is a long time for this well to just sit there.....Has anyone here experienced anything like this? Any other thoughts would be apreciated!

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I have never personally experienced a pipeline hook up for this long - but I am betting that the operator feels that area is not economic to merit laying a pipeline.

 

I have heard from two different sources that, with today's gas prices, the Fayetteville is not economic

 

Sorry to put some gloom on the rose, but just passing this along

I am not sure what you mean by that. Why would't it be economical? I do know nat gas prices are relatively cheap, but I don't understand why a driller would set up a well for such an extended period of time without doing something with it. It is my understanding by talking with SWN and the lease writer that the the area is so vast.....182,689 acres, that they just can't get to all of it. Maybe they acqired more than they could handle. (That is the feeling I get by talking with them) According to the shut in clause it would seem that they have to make some type of effort to produce something. What that is can be argued as anything as far as I can tell. Any thoughts? I'm just fishing for ideas.

Thanks!

Depending on well costs and pipeline costs, the return on investment may not merit putting capital here - versus putting it elsewhere (e.g. Southwestern is heavy in the Brown Dense oil play in southern Arkansas / Northern Lousiana).

I have been in the industry for over 30 years and have seen "completed" wells left stranded and not produced for similar reasons.

I just looked at map on DrillingInfo that shows the Ozark Highlands permitted locations versus the rest of the trend. They are definitely sitting outside the area of max drilling - figure there has to be some issues here as to reservoir quality / potential reserves that is stopping operators from extending their reach into this area. 

Sorry I can't shed more light on Southwestern's thinking.

Thanks for your imput. What is the longest time that you have seen a well Stranded? What do you think is realistic to expect some effort from these guys before getting an attorney? My family is begining to get frustrated here. Seven years ago an agent from Seeco said that the particular well we had could potentialy produce up to $300 a day! We were excited to say the least! He also said that six more wells were in the plans for the rest of the eighty Acres that we have the mineral rights to. It has been seven years now.........We feel kind of isolated and confused as well. Once again thanks for your imput.

 

Fred

 

Fred

I have seen wells "stranded" like this and never put to sales.

Best example that comes to mind of a well that just sat there for a long time prior to being put to sales is in Tennessee where gas well sat for over 20 years before another opertor came in a built pipeline.

When I looked on DrillingInfo.com, I saw several more Ozark Highlands wells that had been permitted but never drilled / all were Seeco permits.

I would suggest that you figure a way to get communication with Seeco as to what is going on here and what there plans are. A letter from the landowner may not get as much attention as one from a lawyer or O&G representative.

But after 7 years, no sense waiting any more - it may take a year to get a legitimate reply.

By the way, do you have any more details that you can share as to the location of your well? e.g. Section, Township . Range?

Thanks

Yes....It is SEC.03-T10N-R20W Pope County, Arcansas. Please let me know what you think.

Thanks!

Fred

 

Anything?

 

Sorry for delay in response - been covered up here.

Not a lot of info out there but combination of distance to nearest pipeline hook up (at least four miles) and probable low ultimate recovery (tied in part to shallow depth) points to operator thinking that this well does not suppor the additional costs of laying pipeline to hook well to sales.

Plus well is listed with state as "temporarily abandoned"

Plus a look at the leases filings indicates that SEECO is not extending any of its leases in this area - just letting them expire. Chesapeake is only company doing any extensions - and they are 5-6 miles away to the south (in heart of historical production in this township).

Overall, things are not lookin good for a well to be drilled and / or put on line in this area.

Boils down to economics.

Thanks again. You are right, that dosen't sound good at all. I will try to get in touch with the Arkansas Oil and Gas Comission. Seeco has told me that they don't have any new plans for the well other than it is shut in untill further notice......They're realy no help at all.......Any other suggestions welcome!

 

Fred

Mr. Fred, with all due respect, I can't help but wonder if the obvious is being overlooked.  Some point to ponder are that SWN has hooked up thousands of wells in the last 7 years, very few of which are in Pope county.  Penn Virginia, PetroHawk, and SWN have all tried over there, none of which started a continuous program in the county. Gas prices are way down from 7 years ago, making marginal wells then worthless now. Add to the low price is the extra expense of working in Highlands unit, extra red tape and such, and it really makes the area start to look iffy.  It may seem that no help is being offered, but it looks as though there is no help to offer. It seems that the area in Pope county just isn't worth the trouble right now.

In 1981 I was in NW Colorado. Texaco had drilled some wells, the Roberts Field, I beleive it was called and that was drilled in 1957 or so.  It had not produced in 1981 and the pipeline to the area was being lain as we drill about 2 miles away.

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