Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 12, 2010 at 7:14

Royalties will be paid in the unit/section in which the wellbore perforations are located. On the SONRIS Well Scout report, it looks like this:

200' FNL & 390' FWL OF SEC 24. PBHL: 250' FNL & 390' FWL OF SEC 13.

The surface location is in Section 24 but the Bottom Hole Location for this well is in Section 13. Mineral interests in that section will get the mail box money.

Permalink Reply by BirdDawg, plain ole' idiot on June 12, 2010 at 7:23

David,
The mineral owners in Section 13 will receive all of the royalties. Good luck!
They drill from the adjoining section so they can preforate the lateral at minimum distance to the unit line, thereby hopefully increasing production.

Permalink Reply by JDA on June 12, 2010 at 7:30

Thanks for the information.

Permalink Reply by LWC on June 17, 2010 at 3:05

BEUSA is attempting to commingle the Hosston, Cotton Valley and Haynesville shales. Reportedly, this may increase the production of a well if one formation has higher pressures that can aide a formation with low pressures. Most leases are signed for the Haynesville formation, when a mineral owner is leasing for all 3 formations, how would it change the wording of the lease and the amount of bonus to be expected? If it changes it at all!

Permalink Reply by Skip Peel - Mineral Consultant on June 17, 2010 at 4:55

The Hosston and Cotton Valley formations are primarily sandstones, not shales. If the sands are "tight", they can be fraced. High pressure differentials do not help but hinder production from multiple zones. I believe that commingling may be possible after the Haynesville formation pressure drops over time. I think that vertical wells can commingle Hosston and Cotton Valley now as their formation pressures are similar. Where Hosston and Cotton Valley require horizontals to be economic there will be separate wells. A depth clause does not distinguish formations and unless you own many hundreds, if not thousands, of acres do not expect a lessee to lease you by formations. 100' below the deepest depth produced should be the cut off. And the bonus is for all formations.

Permalink Reply by LWC on June 17, 2010 at 9:07

So in essence you say the Haynesville shale has pressures high enough to require horizontal drilling and the Hosston and Cotton Valley can be commingled now with a vertical well? Sorry, I'm in a learning curve about the procedures for gas production. You've been very helpful. From what you are saying it doesn't sound as if all 3 could be commingled at this time because of the Hayneseville high pressures?

Permalink Reply by LWC on June 17, 2010 at 9:08

Can you explain the difference between shale and sandstone and how it effects gas production?

Permalink Reply by Les Bamburg on June 17, 2010 at 17:33

LWC, many sandstone formations have higher permeability (ability to flow) and can produced with vertical un-frac'ed wells while some sandstones are "tight" (low permeability) and will require fracture stimulation and/or horizontal wells to be economic.

Any shale formation that is developed will require fracture stimulation and likely also horizontal well.

Permalink Reply by Les Bamburg on June 17, 2010 at 17:28

LWC, Haynesville Shale is being developed with horizontal multi-stage frac'ed laterals because of the very low permeability and this is the only way to make economic wells.

A shallower Hosston or Cotton Valley formation can be commingled after the flowing pressure of the Haynesville Shale production declines to the same pressure (or lower pressure) as the shallower formation.

Permalink Reply by LWC on June 18, 2010 at 2:30

Les B,
Thank you for the information--it was very helpful.

Permalink Reply by JDA on June 17, 2010 at 9:43

Currently the well to be drilled is listed as a Haynesville Shale well. Is this correct? It will be drilled in Sec. 24 but the bottom hole is in T 17N R 9W Sec. 13. I leased my land in Sec. 13 just before the news of the Haynesville broke. It was leased to a landman for a company from Houston that was to drill shallow wells in Sec. 13 and 14. They were never drilled. Am I correct in my assumption that for their to be a Haynesville well drilled he (the landman) would have had to sub lease or he is participating in the well. Either way I would still get my royalties. Is this correct?

Permalink Reply by Les Bamburg on June 17, 2010 at 17:19

JDA, as you said the following Haynesville Shale well will be drilled from Section 24 with horizontal lateral located in Section 13. Yes - your lessee has either farmed-out the acreage or is participating in the proposed well. In either case you will still be paid your royalty.

Petrohawk, Lee 13 #H1 Well, Serial #241437, S24(13)-T17N-R9W