landowner

the south arkansas horizontal well results

deltic stock is going nuts i guess because they have such a huge

mineral interest in the brown dense area and the leasing companies

are still going full bore so i would conclude that the well is a smoker.

anyone else have any insight?

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on February 7, 2011 at 5:58
It will all still be there in the Spring.  No need to get in a rush!  LOL!  Maybe I need to post a tutorial for all those who wish to follow SMK related activity along the AR./LA. state line and do so from the comfort of their computer.  The only draw back is that it may diminish some of the rumors that tend to drive the thread.

landownerPermalink Reply by Joe Deerhunter on February 8, 2011 at 13:24

Hi Skip ,

I'm brand new to the group and pretty innocent in the ways of the oil patch.  But my family has had leases & mineral interests in Union & Columbia County for many years, must have had a good lawyer somewhere back a few generations.  Anyway the old folks have passed on and after a long lull in activity we are starting to be contacted again - yes, by Triad - and I came across the group while trying to edjicate myself.  

I have plenty to learn so I for one would appreciate that tutorial!

Also any up to date ideas on what lease/royalty to try and get.  I read a few stories in the Magnolia Reporter saying that Bonanza Creek had some good production in the Dorcheat-Macedonia field.

Any other suggestions would be appreciated, I'll try to be a good participant in the forum.

I suppose one bit of advice is gonna be "get a good lawyer" which will beg the question of "which one?"  I was a little kid in the Magnolia area but have been out of state for quite a while now.

 

 


landownerPermalink Reply by L Davis on February 7, 2011 at 6:32
Albemarle is a chemical company that extracts chemicals from the brine water.  My brother recently leased 20 acres as an oil and gas lease to Albemarle in S22.  Runors were that they were looking for gas to supply the plant as fuel.  They did not want additonal acreage that my brother had in the area.  Their brine leases do not allow them to exlore or produce oil and gas other than as a by product of producing brine.  So it is a mystery as to what they plan to do.  There have been no other rumors of Oil and Gas leasing in the Village area.  The leasing has been to the south of Village.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on February 7, 2011 at 6:49
Looking through the application documents online I find one mention of a "Notice of Intention to Drill a Brine Supply Well (AOGC-2)".  Not being familiar with brine wells, I thought that this was a horizontal SMK Lime well.  The remainder of the permit documents would appear to support an oil or gas well.

landownerPermalink Reply by L Davis on February 7, 2011 at 7:01
The brine is produced out of the Smk formation.  In this area they have brine leases and have recently added some oil and gas leases.  The horizontal part is the mystery.  I wonder if they may try to produce brine and gas from a horizonal well.  Also, the 8080' does not seem deep enough to get to the bottom of the SMK.

Oil & Gas ProPermalink Reply by Paul M. Hess on February 7, 2011 at 7:10
Great Lakes Chemical, Albemarle and others time past have drilled wells into the thicker portion of the Reynolds Oolite, Upper Smackover, to produce the brine and extract Bromine and other chemicals. My suspicion is that they will try the horizontal in an effort to provide increased brine flow and avoid the cost of drilling multiple locations for similar supply! It should be noted that some of the old brine wells have produced minor amounts of oil, adding to the bottom line. As with the exploration for oil & gas, tests of the saltwater produced from surrounding wells may help identify a trend with high potential for the chemicals they seek. And that trend may well run out under a surface water reservoir, or a very swampy high expense area on which to construct a drilling pad. Hence a horizontal effort. The one time producing saltwater has profit potential.

landownerPermalink Reply by L Davis on February 7, 2011 at 7:18
Much of this area is in a large creek bottom that is a flood plain about one mile wide.  This could help explain the horizonal effort.  I do not think that this is a brown dense exploration effort.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on February 7, 2011 at 7:23
I agree.  Thanks for the explanation Paul.  L. Davis do you know how mineral owners are compensated for production from brine wells?

Oil & Gas ProPermalink Reply by Paul M. Hess on February 7, 2011 at 7:25
"L", that description sums up why a horizontal is planned. Much easier to maintain the brine production when kept out of high waters and less chance of surface water contaminating, diluting, the brine produced. As you have stated, brine wells are not brown dense related.

landownerPermalink Reply by L Davis on February 7, 2011 at 7:44

Skip

Several years ago the state set the rate at $25 per acre per year and increased by the PPI.   It is now in the $40 an acre range.  An additional chemical plant that farther porcesses the tailwater out of the Great Lakes plant has been built recently.  The first year was 5 plus cents per bbl and last year it got bumped to just over 6 cents per bbl.  This is in additonal to the $40 per acre brine payment.  Last year I got paid $458.05 on 8.93 acres (both payments).


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on February 7, 2011 at 7:51
Thank, Paul and L. Davis.  I find it interesting that the SMK in S. AR. produces commercial brine and oil/gas.  And that horizontal drilling has applications for both.  We have a GHS Lignite Group, maybe we could use a Brine Group also.  We'll see if anyone is interested.

Oil & Gas ProPermalink Reply by The_Baron on February 7, 2011 at 8:16

Albermarle focuses on stripping Bromine from brine. South AR has one of the few areas in the world where Bromine can be economically stripped from brine.

 

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