Replies to This Discussion

Permalink Reply by etx44 on September 2, 2010 at 7:13

EXCO is very active in NW San Augustine County, TX.
They are after super pad sites (600' x 600' 8.26 acres) and
15,000' deep Horizontal wells.

They are putting the drilling sites off lease, that sounds like
a bad deal to me. Yes you get paid for the site but you give
much of it back if you get no royalties.

Permalink Reply by jffree1 on September 2, 2010 at 7:46

They are doing that so they can drill into more than one unit from a single pad and to optimize the number of perforations they can put in a lateral and stay within the field rules. It is probably not detrimental to the off site surface owner. I don't follow how "you give much of it back if you get no royalties". Can you explain what you are thinking?

Permalink Reply by etx44 on September 2, 2010 at 10:08

I may be wrong but royalties on 8 acres may be worth as much as the drill site and you do not loose the use of the land.

Permalink Reply by jffree1 on September 2, 2010 at 10:34

So, do both. Lease the drill site for enough to compensate for the loss of surface use. Then when the acreage does get included in a unit you will collect royalties on the 8 acres, to boot.

Permalink Reply by jffree1 on September 2, 2010 at 10:59

etx44, look at these plats for the Common Resources-Red River 619 #1H and the Red River 619 No. 2 #1H. These are two different units where the first well, RR 619 #1H, was drilled in the spring of '09. The drill sight was included in that unit. Later, they permitted the RR 619 No. 2 Unit, #1H. The drill sight is off-lease, in the RR 619 Unit.

These wells and units now belong to Exco/BG.

RR 619 #1H
http://webapps.rrc.state.tx.us/dpimages/img/700000-799999//PR000071...

RR 619 No. 2 #1H
http://webapps.rrc.state.tx.us/dpimages/img/700000-799999//PR000074...

Permalink Reply by etx44 on September 2, 2010 at 13:36

This is a new Exco/BG site.

http://webapps.rrc.state.tx.us/dpimages/r/902792

Permalink Reply by jffree1 on September 2, 2010 at 14:06

Did you see the four circles on the drill site? It looks, to me, like they are planning to drill into multiple units from this one pad. The pad will be included in one of the units because to drill all around it and not produce those minerals would be considered waste of the resources under that acreage. TRRC looks carefully at these units when they have an off-lease drill site.

Permalink Reply by etx44 on September 3, 2010 at 5:54

jffree1, thanks for the help.