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Permalink Reply by Skip Peel - Mineral Consultant on June 12, 2010 at 5:32

fred, only one will end up as the operator in the unit. Sign with the one that makes you the best lease offer. Your lease terms will be honored regardless of which one prevails.

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Permalink Reply by fred on June 12, 2010 at 5:43

I have aleady been to a site in rural Caddo where I have seen two completed wells, one by Chesapeake and one by Petrowawk, and they are in the same section (just a couple hundred feet from each other). Is one of these companies the "operator" or what?

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Permalink Reply by Skip Peel - Mineral Consultant on June 12, 2010 at 5:50

I can not answer definitely without the section-township-range of the wells you mention. Keep in mind that just because a well has a surface location in one section does not mean that its lateral is located in that section. There are numerous instances of companies with a surface location in one section but the perforations in the lateral are located in an adjacent section. In order to get the maximum length lateral within a standard section, it is common practice to drill from outside the section.

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Permalink Reply by fred on June 12, 2010 at 6:15

Why can't there be two operators in the same unit drilling 2 different wells?

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Permalink Reply by Skip Peel - Mineral Consultant on June 12, 2010 at 6:24

In the case of Haynesville Shale units, we are discussing "Conservation Units" formed by the LA. Office of Conservation. Only one operator is designated for a unit. The mineral interests are force pooled meaning that all mineral tracts receive their proportional share of production. This is an enforcement issue. The state wants only one responsible party. Now keep in mind the difference between units and sections. There is often multiple drilling and production units with different operators in the same section. They are producing different formations/depths. Units are formed not just by their surface foot print but by the underlying formations/zones that are being produced. There can be multiple operators in a section when there is no unit designation and the wells are "lease wells". This is rare in the case of most wells and particularly so in the Haynesville.

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Permalink Reply by Bill R on June 12, 2010 at 6:32

In San Augustine County, we have two operators drilling the same tract as well. Both Exco Operating Company and Southwestern Energy are drilling up in the Northwest end on the HT&B RR Co. (152) survey.

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Permalink Reply by fred on June 12, 2010 at 6:43

In the case of the urban Shreveport section, I have notices to the State from both Petrohawk and Chesapeake attorneys. The Chesapeake letter acknowledeges that Petrohawk has already applied for the unit and that Chesapeake is applying for the "same/identical" unit. What is this about?

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Permalink Reply by Skip Peel - Mineral Consultant on June 12, 2010 at 7:05

Both want to be the operator. The Commissioner will decide which company will be granted operator status. Chesapeake claims to have a slight majority of the acres in this section.

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Permalink Reply by fred on June 12, 2010 at 7:14

In the case of my rural example, the location is Section 22, 16N, 15W. I guess the Petrohawk well is actually going into Section 27, right?

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Permalink Reply by Skip Peel - Mineral Consultant on June 12, 2010 at 7:18

That's correct. In the SONRIS Well Scout report under location, it looks like this.


200' FSL & 2640' FWL OF SEC 22. PBHL: 250' FSL & 2640' FWL OF SEC 27.

The surface location is in Section 22 and the bottom hole is in Section 27.

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Permalink Reply by fred on June 12, 2010 at 7:21

In the case of my urban Shreveport example, the location is Section 32, 16N, 14W. This is where Petrohawk and Chesapeake have applied for the same unit.

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