Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on September 23, 2012 at 12:26

If the proposed unit is approved and includes you section, you will participate in any production.  Pre-conference notice letters are sent, not only to those mineral interests of record within the proposed unit boundaries, but to those immediately adjacent to a distance of 1000'.  Receiving a letter does not necessarily indicate that you are included in the unit you'll have to look at the plat which accompanies the letter.  As to whether your lease is in force for the new unit, the lease language will tell you.  If you have no "depth clause" or a standard depth clause which gives CHK the development rights to the deepest depth drilled plus 100' at the end of the primary lease term, your original lease is still in force as the Cotton Valley Group is shallower than the Haynesville Shale well CHK drilled in your section.  CHK is drilling for "wet gas" in a limited fairway proven up by Indigo Minerals in south Caddo and north DeSoto parishes.

Permalink Reply by nrp61 on September 23, 2012 at 13:42

Thanks for the info Skip.  I looked at the plat and it did not look like my land was anywhere near the area they blocked off.  The attorney's representative said I was sent the letter because my land is in the "spill over area".  Hey Skip...what is "wet gas"?

Permalink Reply by Andrew on September 23, 2012 at 17:56

Wet gas is natural gas that is rich in natural gas liquids (NGLs). "dry gas" is methane, the simplest form of hydrocarbon. NGLs include butane, ethane, propane and pentane. The NGLs are much more valuable than dry gas today, trading around $40 per barrel on average.

Permalink Reply by nrp61 on September 23, 2012 at 18:04

Wow, I wish that well was on my land.

Permalink Reply by Skip Peel - Mineral Consultant on September 24, 2012 at 1:43

NGLs have decreased in market price over 50% in the last year.  As more energy companies pursue wet gas my concern is that they will create the same over supply that has depressed dry gas prices.