Elm Grove Royalty Owners Beware

It looks like JW is up to its old tricks again. They want to commingle all production including the Haynesville. This time they do mention that they would do this only if the unit ownership interest is the same. Yeah right. Read item number six of the enclosed PDF.
Jay

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Permalink Reply by Henry on May 12, 2010 at 0:26
Jay,
Will you help me understand? Is the point to allow J-W to drill to CV or Hosston, and HBP the Haynesville?
Permalink Reply by Les Bamburg on May 12, 2010 at 3:22
Jay, I know people are sensitive to this topic but commingling has been done in many parts of Louisiana and Texas long before the Haynesville Shale. It can be beneficial as it could allow for accelerated production from any shallow formations by commingling in a deeper Haynesville Shale producing well.
Permalink Reply by The_Baron on May 12, 2010 at 4:10
Jay, would you think there could be any problems with an overpressured resevoir like the HA being comingled with a lower pressure CV?
Permalink Reply by Les Bamburg on May 12, 2010 at 9:33
Baron, normally the operator waits until the deeper horizon partially depletes and then then adds the shallower production. This is a very common practice in several states.
Permalink Reply by Les Bamburg on May 12, 2010 at 5:56
Jay, that is reason the Commision only allows commingling when the working interest and the royalty interest are the same in the two formations.
Permalink Reply by Bobi Carr ("parker") on May 14, 2010 at 16:53
Les,

Am I correct in assuming that comingling production would make the shallow formations more cost effective to produce and thereby increase development?
Permalink Reply by Les Bamburg on May 14, 2010 at 17:20
Bobi, you are absolutely correct. It may allow an operator to produce a shallower thin sandstone that does not contain sufficient reserves to justify a separate well. That would be what I call lagniappe and would add incremental royalty dollars.
Permalink Reply by Les Bamburg on May 12, 2010 at 3:25
Henry, this application does not allow J-W to HBP deeper Haynesville Shale rights with a CV or Hosston well.
Permalink Reply by The_Baron on May 12, 2010 at 8:40
"Aubrey's robots "

LOL, thats the truth....
Permalink Reply by awharris on May 13, 2010 at 9:28
I was under the impression that many of the LCV wells in Elm Grove ARE HS wells in disguise. There is indeed something fishy and I need to investigate when I have the time!

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