Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 7, 2010 at 13:17

JT. Depends on petrophysical characteristics and varies by location. In your neck of the woods, I hear more about Smackover prospects but there are also other productive sands, CV included. Here is the question that I would ask if I were you, how many of the known sand formations in north central LA. are sufficiently "tight" to benefit from horizontal completions. Those formations that have a relatively high permeability have likely been produced before now (with vertical wells). The next play will be using current technology in areas where the old technologies did not produce economically. I suspect that a number of companies have an idea where those formations are located but do not consider them economic to develop at today's nat gas prices.

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Permalink Reply by Les Bamburg on March 7, 2010 at 16:04

JT, production from the Cotton Valley Formation is more widespread across NWLa & ETx. As for more prolific - that would depend on the specific area and field.

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Permalink Reply by red rider on March 7, 2010 at 20:15

was the driller Questar? and could you give/ obtain the well #? or any other specifics? was it T19-15-9w? just curious!

thanks

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Permalink Reply by North LA on March 10, 2010 at 4:48

Horizontal oil well? I thought that was an urban legend. Is the well you are talking
about in LA or Ark? You think this could be the start of a new oil play? I own some property close
to JT that's why I'm asking.

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Permalink Reply by red rider on March 8, 2010 at 14:09

well thank you anyway! was kind of getting excited.

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Permalink Reply by Skip Peel - Mineral Consultant on March 11, 2010 at 2:25

Formations do not have a static uniform definition. Because of variances in depth, formations are defined by a range in depth of feet in a specific location by referencing a near by well with a log covering that depth. An operator can call the formation they apply to develop anything they want within reason but it is the depth description that matters. In theory a unit may be called a LCV but the depth description could contain the Cotton Valley, Haynesville and Gray sands. In practice the LOC no longer allows shale formations to be included with sand formations in a depth description. In the Terryville Field of Lincoln Pairsh, Field Order 370-E defines the Gray Sands as 12,370' - 12,662'. In Claiborne Parish, the Gray Sand might be defined by a depth range of 12,000 - 12,300' as an examaple. Wherever you find a Gray Sand well you have found a penetration of the Haynesville Sand.

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Permalink Reply by Les Bamburg on March 11, 2010 at 3:59

JT, don't confuse the terms formation and "zone". For example the Haynesville Units are based on defining a "zone" or particular depth interval that can include more than one formation. That is the reason the Haynesville Unit can include both the Haynesville Shale and Bossier Shale. It is also the reason a Hyanesville Unit could be for the Haynesville Shale or Haynesville Sand (or Haynesville Limestone) dependent upon location.

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Permalink Reply by Ringo Roo on March 17, 2010 at 3:55

Then how does a mineral owner lessor write an addendum Vertical Pugh clause to reserve the "zones" or "formations" below AND above the paying producing zone or formation of wells not yet drilled. Seems like any wording can be interpreted any way the oil co wishes. Thanks

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Permalink Reply by Skip Peel - Mineral Consultant on March 17, 2010 at 4:07

Standard vertical depth clauses preclude development rights "below" a defined depth but not above. For a lease covering a specific zone there would need to be depth definition such as "10'000" to 12,000'". Lessees rarely agree to such limitations unless the Lessor owns/controls quite extensive mineral holdings. And has a really good O&G attorney.

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Permalink Reply by Ringo Roo on March 17, 2010 at 4:27

So is the best I can do on my 40 acres in SE Shelby Co Tx be "Lessor reserves all rights to all zones and strata BELOW 100 feet BELOW the deepest paying producing interval or formation of any well or wells." ? Thanks Skip

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Permalink Reply by Skip Peel - Mineral Consultant on March 17, 2010 at 4:34

I would require that language in my lease were I in your spot Ringo. The key is that the depth limitation be based on the deepest depth "produced" as opposed to "drilled". Whatever shallower formations may be developed in the future by your lessee or by some other operator through a working agreement, you will receive the royalty percentage contained in this lease. I would not settle for less than 25%.

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Permalink Reply by Skip Peel - Mineral Consultant on March 11, 2010 at 14:25

Permeability. The measure of the connection of the voids in the rock matrix. When the voids are well connected, hydrocarbons can flow through the formation to the low pressure point created by the wellbore perforations. When they are not as in the Haynesville Shale or other "tight" formations, permeability can be artificially enhanced by fracture stimulation. That's a very simple and limited definition. There are natural fracture patterns even within super-tight formations like the HS that's one of the reasons why laterals are generally drilled in a north-south orientation.

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