Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on May 20, 2015 at 15:06

Ben, the application was approved as Field (Ora) Order No. 136-C-8.  Use this link.  The field order should look identical to your application notice.

http://ucmwww.dnr.state.la.us/ucmsearch/UCMRedir.aspx?url=http%3a%2...

There is currently no well drilled in that unit and no permit for a future well at this time.  However SWN could permit, drill and produce a unit well that would hold the leases underlying those 1280 acres.  A unit order is effective indefinitely and has no requirement for an operator to drill a unit well.  The lease terms and their expiration dates are the most important consideration as unitization, a field order, does not hold leases in force without operations or production.  The new unit applications in the Tick Creek Field could/might indicate that SWN intends to drill a unit well before those leases expire.  It is a relatively simple and inexpensive process to form a unit but it does provide some real advantages for an operator.

As much as we would all like to see SWN get to drilling again in the Lower Smackover I always find these very large units of concern for mineral lessors who might have their development rights held by a vertical well.  The only logical reason for a 1280 acre unit is for horizontal development....unless of course you are the operator and want to hold as many leases with the least possible cost..

Permalink Reply by Ben Barnhill on May 20, 2015 at 15:34

Thanks Skip, as always, I appreciate your expertise.  The field order you mention only covers (I believe) 16 acres of the total 126 acres leased  by SWN. Kingfisher had done some seismic testing on our land back last summer. That gave us some hope that drilling was imminent. Then the Saudi's crashed the market and our hope went right out the window.

FYI, SWN has renewed our lease, exercising their option to do so under the old lease.It appears they now have many more years to sit on this. I just hope the new Tick Creek activity is an indication of renewed interest/activity in the Lower Smackover and that something good will happen soon.

Permalink Reply by Skip Peel - Mineral Consultant on May 20, 2015 at 15:42

You're welcome, Ben.  I hope you're right.  SWN left the Brown Dense play a good bit before the decline in commodity prices.  When they bought the big stake in the Marcellus Shale Play their focus shifted there.  At about the same time Whiting Petroleum bought out Kodiak and became the major player in the Bakken.  So both of our Brown Dense operators left us with a hope and a puzzle.  It's good to hear that SWN extended your lease.