Replies to This Discussion

Permalink Reply by dbob on May 9, 2018 at 13:38

David,

Drilling of horizontal wells in Texas is covered by spacing requirements that vary be field.  But the path of the well needs to be in a drilling lease or unit.  Can you be more specific on the issue you are having?  

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Permalink Reply by David Wist on May 9, 2018 at 13:58

dbob, let me be a little more specific... suppose an independent drilling company acquired the smallest possible lease requirements for drilling a well, let;s say to Travis Peak, around 7000 feet in East Texas...Travis Peak has been producing energy for over 70 years in East Texas...

What is to stop a "mom and pop" energy company from acquiring the minimum surface spacing requirement and, instead of drilling to Travis Peak, decides to drill to 11,000 feet in Cotton Valley? And, what if they get to Cotton Valley they decide to change bits on a rig which doesn't require rotary movement of drill pipe, and to drill horizontally under someone else's minerals.

I'm a Harrison County holder of minerals around Pine Island on Caddo Lake, and I've seen companies like Chesapeake and Penn Central complete wells within a mile of my rights which have produced as much as 15,000,000 cu ft of gas per day!

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Permalink Reply by dbob on May 9, 2018 at 17:14

If you haven't already done so, I suggest you look up the wells near you using either the RRC drilling permit query http://webapps2.rrc.state.tx.us/EWA/drillingPermitsQueryAction.door  

or use the GIS web viewer.  

http://wwwgisp.rrc.texas.gov/GISViewer2/

You should be able to get to the unit plat for the wells of interest and see the area included in the unit, as well as the list of mineral owners.  

You don't mention if they are 1 mile north, south, east, or west of you, but generally speaking, most of the lateral wells will run on something near a north/south orientation.  Drainage from wells 1 mile east or west of your minerals is highly unlikely.  

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Permalink Reply by David Wist on May 9, 2018 at 17:33

Thank you. Mr./Mrs. dbob...

I'm going to be candid, aged 72 in my comments.

The Texas Railroad Commission doesn't have a clue as to the degree of theft which is being conducted within its confines, at least in East Texas. I am an amnestial victim of theft, having had a distant crooked relative spud and produce a natural gas well on minerals which were not entirely his.How does an absentee owner have any way of preventing theft... these minerals were meant for my children/grandchildren!

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Permalink Reply by David Wist on May 9, 2018 at 17:41

In addition, there doesn't appear to be any process for drillers/thieves to validate their claim without surface rights owners intervening.

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Permalink Reply by Hale Yayuh on May 9, 2018 at 22:19

What you are talking about is extremely rare. There is fraud in every industry. Theft of oil/gas by drilling into a spot that they shouldn't has happened in the past but it's, like, one out of a million cases. Any company who is capable of drilling a horizontal wellbore, the odds of fraud occurring such as you say is just about non-existent, IMO. A horizontal well is going to cost several million dollars. Mom and pop operations are not capable of that. Laws already exist, nothing new is needed.

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Permalink Reply by Skip Peel - Mineral Consultant on May 10, 2018 at 3:35

Mineral trespass should be viewed in light of the type of well and target formation.  When discussing a horizontal well, we are often dealing with an unconventional reservoir.  This is quite different than the rule of capture associated with a conventional reservoir.  In a conventional reservoir, usually produced by vertical wells, formation permeability allows hydrocarbons to migrate over long distances to reach a wellbore.  An unconventional reservoir does not have sufficient permeability for hydrocarbons to migrate far.  For that reason horizontal wells are employed to maximize wellbore contact with the formation and hydraulic fracture stimulation is used to create pathways for the hydrocarbons to migrate to the wellbore.  To put is simply, there is limited or no drainage beyond the area fractured in immediate proximity to the wellbore.  And operating companies are quite careful not to frack beyond their target formations as it is a waste of money and a potential harm to their well if they frack into water prone formations or those with impurities such as CO2 or H2S.

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Permalink Reply by David Wist on May 10, 2018 at 15:43

Mr. Zimmerman, I agree with you somewhat, but coming from an oil family, its a little difficult to believe we are all honorable men! I grew up in the oil fields of East Texas, Rusk and Gregg counties as well as Harrison and Marion counties. When the East Texas field was discovered in 1930, it drove the price of oil down to 5c / barrel!

Many members of my extended family have become multi millionaires, or even billionaires!

What is most important to me is that as a society we all agree to obey our common laws.

I have met far more crooked persons in the oil industry than honest!

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Permalink Reply by Bob Zimmerman on May 10, 2018 at 16:22

Yes, criminality is rampant in the oil patch. The whole things seems to revolve around kickbacks. From a load of gravel to miles and miles of pipeline. It's all rotten to the core and nice guys don't last long. Here is an example of what goes on. 

https://www.nytimes.com/1978/02/27/archives/legal-woes-beset-mcderm...

Permalink Reply by Bob Zimmerman on May 10, 2018 at 14:43

< one of these horizontal rigs can drill down a few thousand feet and horizontally drill a mile or two over and steal petroleum that they have no mineral rights!>>>

Fortunately, the reality is not that bleak. See :  2. Limitations on the Rule of Capture

file:///C:/Users/BS/AppData/Local/Packages/Microsoft.MicrosoftEdge_8wekyb3d8bbwe/TempState/Downloads/Smith_OM03_preview.pdf

I recall coming across a case some years back where a major oil company trespassed on another major's leaseholds for years in South East Texas. Because Texas allows for punitive damages, and the amount of oil involved so large, the court award was in the multi-millions. 

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Permalink Reply by David Wist on May 10, 2018 at 18:20

Thank you, Mr. Zimmerman, for your kind words of advice!

I own, through inheritance, approximately 600 acres of minerals on the shore of Caddo Lake, around Pine Island and where the old Fly-N-Fish was located. My ancestors were the Hopes, probably the first settlers in Harrison County, around 1840. The surface rights were sold almost a century ago, but our family has always held on to the mineral rights.

The last time I remember entering into a lease agreement was around 1975, and the landman was Dudley Baskett of Marshall, TX. The lease was for 5 years and sold to Amoco Production Company of Tulsa, Oklahoma.

I have several relatives whom have gotten rich beyond their wildest dreams in East Texas...My first cousin was Robert (Bob) Cargill of Longview, Texas... a laid back east Texas boy who never met a stranger... he had in his control enough mineral leases easily worth approximately a billion (with a B) dollars when he passed away in the 1980s...I had another less close cousin named Samuel Vaughan of Jonesville, TX, who died in a plane crash in the early 1990s who was the owner of Winchester Production company.

Here's my problem: If they are worth anything, I have no want or need from anything these minerals could provide... I have retired very well from computer services and sales.

What I would like is this: I have, at present, three grandchildren whom I love dearly, but have no ties to East Texas...

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Permalink Reply by Bob Zimmerman on May 11, 2018 at 8:19

Mr. Wist,

You need to see an estate planning expert, most certainly if those mineral rights are still yours. There are gifting and donation things you can do to unload some of your wealth on your grandchildren. Shreveport, Dallas should be full of experts in the field.

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