Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on June 17, 2018 at 12:24

vigo, you've been busy.  I wish more mineral owners would do the kind of internet research and seek interpretations for the data that's out there as it relates to their mineral interests.  I'll try to find time to look through what you have found but I have two initial takeaways.  First, scholars that publish scientific papers don't have to prove capable of drilling economic wells to keep their jobs.  Those that live with the drillbit tend to be a little skeptical of academics that don't have to drill profitable wells.  Secondly, 2006 might as will be fifty years ago as far as the evolution of knowledge regarding unconventional reservoirs. 

Can you give me the section-township-range for the Glover and Patterson wells?  The do not appear to be located in Natchitoches Parish.

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Permalink Reply by vigo on June 17, 2018 at 14:45

Point well taken. But those who "live with the drillbit" tend to keep things very close to the vest, so I make do with what can get. Fortunately, my only risk exposure is how much I extend my wishful thinking.

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Permalink Reply by Skip Peel - Mineral Consultant on June 17, 2018 at 15:17

Didn't recognize the Glover and Pattison wells because they are not in Natchitoches.  These are Red River wells.  In that specific area a few miles appears to make a significant difference.  The Glover has impressive IP and early production history.  Good pressure and a tight choke for a short lateral, 3630'.  A new version, long lateral well in this location would be expected to be an economic well.  The Pattison is not as good on the same basis but the latest high intensity completion designs have been a pleasant surprise in some unexpected peripheral areas.  So never say never.

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Permalink Reply by Craig Cooper on June 17, 2018 at 13:29

vigo,

Mancini et al, 2012 published a 3 part series: "Basin Analysis and Petroleum System Characterization and Modeling, Interior Salt Basins, Central and Eastern Gulf of Mexico" which provide a lot of detail about E. Texas, Louisiana & Mississippi Salt Basins. The series contains a great deal of information about all of the petroleum systems & geology of interest here, however the three combine for a total of 447 pages so may be a bit overwhelming.

http://www.searchanddiscovery.com/documents/2012/10396mancini/ndx_m...

Your layman's take-away is fair, though the reservoirs below the Haynesville are / will be more akin to conventional reservoirs so will possess higher (finding) risk. The organically rich Bossier & Haynesville shales are self-contained reservoirs (i.e. hydrocarbons are generated & remain in place) so any well drilled into them will find hydrocarbons.

The sub-Haynesville rocks are not self-contained reservoirs and must rely on hydrocarbons being generated elsewhere & expelled from those source rocks, migrate into the sub-Haynesville rocks & then be trapped in them thereby forming an accumulation / potential field. Each step along the way contains risks which could ultimately prevent hydrocarbons from accumulating.

So, while there may be hydrocarbon potential below the Haynesville, risks are fairly high and Skip's original suggestion to consult an experienced petroleum geologist & attorney is a good one.

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Permalink Reply by vigo on June 17, 2018 at 15:30

Thanks for the link, Craig.  I am retired and exceedingly curious. So 447 pages I can take in stride. I also appreciate the additional information on the nature of sub-Haynesville formations.

About your endorsement of Skip's advice. My thinking was (and my attorney seemed to indicate) that it would be both prudent and simple to get the release done, just in case. I was assuming the lessee was obligated to, upon request, record a release, but at their expense, not mine. I'm not seeing why I'd need an attorney and consulting geologist to accomplish that. But, if I have to bear the expense and hire legal and geological counsel to protect my interest, then the equation changes and prudence says hold off until there is serious interest likely to turn into financial gain.

So, which is the case?

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Permalink Reply by Skip Peel - Mineral Consultant on June 17, 2018 at 15:40

Generally speaking, the Haynesville Shale seldom requires the services of a geologist because there are very few electric logs to read.  And little well control at depth in that transition zone from Red River into Natchitoches.  Now an experienced O&G attorney is well worth the modest expense.  The question is, would you recognize one that fits the description?  Far too many attorneys would claim O&G experience when all they did was read through the mineral code a few times.  In this part of the world a intimate knowledge of case law is required.  And you don't get that from reading the mineral code, it doesn't matter how many times.  Or how many leases one has been involved with.  Seek out the best legal assistance you can find.

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Permalink Reply by Craig Cooper on June 18, 2018 at 1:21

vigo,

A consulting geologist with basin / region-specific experience would be able to provide an assessment of deeper potential for your area and allow you & attorney to make the best informed decision.

Though log et al data is important and part of the evaluation process, use of seismic data (if available) would provide a great deal of value-added supplementary information about deeper potential. It also has the advantage of providing broader areal coverage away from the point-specific well control thereby producing a more complete image of deeper potential and enable you to put your acreage into proper context.

Good luck!

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Permalink Reply by Dion Warr, CPL on June 12, 2018 at 9:09

Vigo:

Apologies for not replying to your post, as I am currently unable, perhaps due to some of the current site issues to which Keith has referred in his recent thread...

You post the following:

My lease has a depth limitation clause that releases "all formations 100 feet below the base of the deepest producing formation". Further, it states that, "in the event the deepest producing formation is from a unitized interval, 'formation' shall have the meaning ascribed to it by" the LOC Unit Order.

My Unit Order defines this interval as "the stratigraphic equivalent" of the "zone encountered between the depths of 11.900 feet and 13,395 feet" of the unit reference well.

The well history for my well on SONRIS indicates:

Measured Depth = 17,101 feet
True Vertical Depth = 13,179 feet.
Haynesville Formation Top = 13,182 feet
Well Producing Interval = 13,775 - 16,942 feet (including lateral distance, not TVD of course)

Based upon the above, if your lands lie wholly within the field in question, in which the deepest producing unitized formation is as set out above, and you are past PT, plus any extensions thereof as applicable in your lease, you should be due a release of the following:

(1) All that portion of the lands leased in that certain Oil, Gas and Mineral Lease dated {DATE} as evidenced in the official records of the Clerk and Recorder of {PARISH, STATE} in {BOOK, PAGE, ENTRY NO.},

(2) As such lands are otherwise retained (e.g., lie within the confines of producing units) {ALL?, PORTION(S) LYING W/I DESCRIBED PRODUCING UNIT(S) IN THE SPECIFIED FIELD}, ONLY as to those depths lying below the stratigraphic equivalent of 13,495' in, or as may otherwise be found in the {REFERENCE WELL, S-T-R (PARISH, IF NECESSARY)}, {REFERENCE FIELD}.


This assumes that you have already received a release for any acreage lying outside of producing units which you were owed under any vertical Pugh clause (likely also in your lease). If not, have the company release any land(s) lying outside of any unit not currently held by production or operations as well.


The whole point behind establishing a reference well for a given formation and reservoir in a field is to provide a common geologic definition that can be applied to that field (or portion of a field). One uses the reference well as a common yardstick that can be reasonably utilized - thereby one need not look to or evaluate each well in each unit when one wishes to affect or request a transaction.

Where one needs to be careful is when definitions change - either for a field, a different reservoir, or sometimes a redefinition may effect a little as a single unit in a field. It is important to be familiar with all unit orders which may be applicable to your point of reference. In some cases, one may find that a single point of property may be affected by multiple orders and on occasion more than one set of field orders. However, at a given formation, a given point can be unitized in one field. So your property may be in Elm Grove in the Cotton Valley formation but in Caspiana at the Haynesville formation (fortunately uncommon, but can occur).

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Permalink Reply by vigo on June 17, 2018 at 13:42

Thanks for your reply. I have all of the information you indicated at hand, so in composing my request I could simply fill in the blanks in your verbiage. Is that what you are suggesting?

My land lies wholly within a specific Section which is defined as a single Production and Drilling Unit which contains only the Unit Well.

For me the relevant LOC documents are Order No. 1165-K defining Haynesville Zone, Reservoir A in San Miguel Creek Field based on Olympia Minerals 26 No 1; and Order Number 1165-K-4 defining unit HA RA SUM within that field. Last I checked, none of these orders had been superseded.

It seems pretty straightforward except for the phrase "stratigraphic equivalent". What is the "stratigraphic equivalent" within the HA RA SUM Unit Well of 13,395 feet in the Olympia Minerals reference well? Does the 13,395 depth translate directly to HA RA SUM? Or is it necessary to compare well logs to determine what depth in the Unit Well represents the equivalent of the strata encountered at 13,395 feet in the Olympia Minerals No 1 log?

A release that includes the phrase "stratigraphic equivalent" seems to leave the precise depth up to someone's interpretation (releasing lessee, prospective future lessee, etc.) at some later point in time.

Is this a case where any/every competent petroleum geologist should come to the same conclusion based on the well logs?

My objective is to understand: (1) how it should play out, so I can judge if I am being treated justly, and (2) what recourse I have if I mistrust the result.

The process seems to be: (1) I would request the lessee record a release; (2) the lessee would prepare and submit the release to be recorded.

So my signature would not be required nor would I have an opportunity to review the release prior to recording - meaning, I would be trusting them to do what is right.

If they fail to act, or if I mistrust the result, I'd have to engage an attorney to assist in securing a proper release.

Am I on target?

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Permalink Reply by Two Dogs, Pirate on June 17, 2018 at 13:55

Vigo have you been contacted about a lease on your property?

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Permalink Reply by vigo on June 17, 2018 at 15:44

On Feb. 12, I returned a call from Adam Choate about my interest in leasing depths below the Haynesville for which, under my lease, the primary term expired in Dec. 2012.  Money was not mentioned. He described his as a preliminary inquiry on behalf of an un-identified client who is considering beginning a leasing initiative in and around 18-10-10 later this year.  With a little digging and interpolation I surmised (but not for certain) that Adam was engaged by Harold J. Anderson out of Chalmette who was, I presume, engaged by the interested client.  Adam also contacted one of my neighboring landowners, apparently mentioning a low-ball bonus figure. In any event, neither of us has received any follow-up.

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Permalink Reply by Dion Warr, CPL on June 17, 2018 at 19:39

Vigo:

That should be about it.  The reference well is used to define the zone [in this case, include the term "Electrical Log Measurement (ELM) as opposed to TVD as ELM is the correct standard as defined in the order.  As long as either (a) 100' below the defined interval or the reference ELM footage is used, the definition is applicable to all comparable strata in the field and reservoir (including Sand Unit M); the intent should be clear - there should be no need to tie back to your specific unit well.

The term "stratigraphic equivalent" actually makes the tie between the reference well and yours.  The log of the reference well will define the unitized interval of the Haynesville.  Where the similar result (usually stratigraphic top and base) is found in your well - it applies, no matter if the actual interval is TVD slightly above or below the defined TVD.  Again, the reference well is the "common yardstick" in your area.  (This also minimizes the confusion of asking for a generic release of your lease below X feet - actual footages in your section may vary enough to either split the target zone or possibly end up inadvertently above or below the intended target. 

RE: Process - The release is unilateral - lessee [or its successor(s) or assign(s)] executes a release of the lease and files same of record.  If they don't feel that a release is owed, they owe you an explanation.  Send the request via registered letter, return receipt requested so that you can mark the date and time of their receipt; they will note same so that they can show timely response.  There are penalties availed to you for lack of timely response (I believe Article 207 of the Mineral Code; an attorney can brief you on what is available and when).

Good luck - And I should disclose, I am not an attorney, nor am I your attorney.  Always retain legal counsel in contemplation of and/or prior to pursuit of legal action.  These issues far exceed one's ability to adequate represent one's own interest (unless you happen to be an oil and gas attorney, but then you aren't asking questions here).

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