COMPANY: XTO Energy Inc, ha ra supp; Faye binning 17h, 2: 243048. WHERE: san Miguel creek, S 17. T. 10N R. 10W. DAILY PRODUCTION: 11207 mcf gas on 16/64 choke; n/a barrels n/a gravity condensate; 100 barrels water. PRESSURE: thru csg lbs. SPECIFICS: Haynesville; perforations, 13436-17748 feet, depth, 17888 feet.
I wonder what the future of this section has in store? The well is barely holding on producing less than 100 mcf per month. The section is between some active drilling by Azul and some production by Southwestern Energy. I wonder if it is more likely that XTO would come back in and refrac the well or if Azul, Southwestern, or another player would buy out XTOs ownership of the section?
First off, if you and other mineral lessors in the unit wish to force the issue, get an experienced O&G attorney to send a "demand to develop" as the well no longer meets the "production in paying quantities" test. Be fore warned that attorneys or firms that XTO will know and possibly have past experience with will want a commitment to pursue litigation if XTO refuses the demand. Filing those types of demands and not following up with a suit leads the O&G companies to ignore demands from those lawyers and firms in the future. XTO does not prioritize the Louisiana Haynesville fairway. They may just sit on Section 17 if they don't get an acceptable offer or no one forces their hand.
Azul is the most aggressive operator in the general area. Keeping in mind that all companies wish to drill long lateral, multi unit horizontal wells, Azul could acquire 17 and then create an HA unit for Section 20 to the immediate south. The other possibility that appears likely is Tellurian. The company has drilled some short lateral wells in Section 8 to the immediate north but could change and drill longer laterals by acquiring 17 from XTO.