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Natural Gas Wells Info.

HOSS

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I was wondering if anybody on the boards has natural gas wells on their property. There are some wells a couple of miles from me that have been capped since the late 70's due to something going wrong with the shafts. The landowner is discussing the repairs and operation with a gas drilling company. I am curious if my land might be sitting on top of some NG reserves.

Has anyone ever dealt with a gas drilling company? What type of deals do they have for exploration? Is there any geological features that hint of gas reserves underground?

I had a co-worker who has land in Kentucky. He has 3 wells and is drilling a 4th. I should say the gas company is. Anyway they pay him 12.5% royalties. That worked out to be $400.00 per day per well. That is why he is no longer a co-worker.......at 1200.00+ per day he don't need to work. I can't get hold of him to ask these questions so I hope there is some experienced folks on this board.

Will the gas companies do the exploration at their cost if it is believed that there is a good chance that gas may be located under the property?
 

Lammie

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Boy did you just ask a hot question. Lots and lots and lots of wells around here. Barnett Shale, baby!

There are people who know a lot more about this than I do. I don't have any wells on my land, but am on a pool that is supposed to have eight and currently has three producing wells. I just sits back and sees what the check is. Prices have been tanking. When oil tanks, NG tanks too. There sure are a lot of wells around here, though, and show no signs of stopping.

You will get more info on here than you probably ever really wanted to know. I mean that. There's money in it but arguments pro and con about it. I think that someday it will wreck the water tables and Lord knows what else, but they are taking it, so one might as well sign the lease and see what happens.
 

backhoeboogie

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Forget that 12.5%. Get 25% or tell them to get off of your land. Go ahead and ask for atleast $5K an acre chum money too. They call it "bonus money" but it is chum money. They will raise the chum money and try to get you to sign for a lower royalty. Don't fall for it.

Most everyone now calls it mail box money now Hoss. Checks from Sunoco, RidgeRock, Chesapeake, Quick Silver, XTO, Carrizo, Berkshire etc. Some are piddly and some are way up there.

I thought the Barnette Shale was great until I found out about the Haynesville. That is better than winning the lotto.

$400 per well per month is nothing to get excited about. $1200 per acre per month when gas was high.

There are lots of fools who couldn't wait to sell the family farm who are crying in their beer right now.
 

backhoeboogie

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HOSS":nyddl5hb said:
Will the gas companies do the exploration at their cost if it is believed that there is a good chance that gas may be located under the property?

By the way Hoss, if they think you have petro reserves, the bloodsuckers will be hunting you down with offers. Most of those landmen are worst than the best used car salesman you have ever seen. They are honed and polished. They'll wine you and dine you, tell you how brilliant you are and stroke your ego in every way. It worked on some aunts and uncles. Each of them lost well over a quarter million in chum money alone. They also signed for 20% royalty.
 

BeefmasterB

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HOSS":13h5gu9j said:
I was wondering if anybody on the boards has natural gas wells on their property. There are some wells a couple of miles from me that have been capped since the late 70's due to something going wrong with the shafts. The landowner is discussing the repairs and operation with a gas drilling company. I am curious if my land might be sitting on top of some NG reserves.

Has anyone ever dealt with a gas drilling company? What type of deals do they have for exploration? Is there any geological features that hint of gas reserves underground?

I had a co-worker who has land in Kentucky. He has 3 wells and is drilling a 4th. I should say the gas company is. Anyway they pay him 12.5% royalties. That worked out to be $400.00 per day per well. That is why he is no longer a co-worker.......at 1200.00+ per day he don't need to work. I can't get hold of him to ask these questions so I hope there is some experienced folks on this board.

Will the gas companies do the exploration at their cost if it is believed that there is a good chance that gas may be located under the property?

Yes Hoss, the drilling is paid for by the company that orders the work done. Prior to any drilling, a landman would approach the owners of the mineral rights in which they are interested in. Do you have the mineral rights to your land? Some land owners have it all and some just have a percentage and yet some have zero.

As mentioned, you can work a pretty good deal, even down to paying for every rut they put in the ground to building a catfish pond for you (like my Uncle got).
 

Lammie

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Believe me, soon enough, someone will be knocking at your door to talk to you about it. Just hold out for as much money as you can. Get an attorney. They will do seismic surveys to find out whether you have the gas under your land and they pay for it all. Whoever "they" are. "They" around here is usually Chesapeake.

Hold out for generous terms. Like Boogie said, 25% and as much signing bonus as you can squeeze out. Find out how big a "pool" you are on, like if it is a whole section of land or half that. It would be worth it to get a lawyer who specializes in this sort of thing, especially if you are talking about a lot of land. Starting from scratch is confusing and you will see folks who will lease cheap and then wish they had not.

The gas industry and all the other industries it supports are what is keeping the economy afloat around here. It can really bring jobs to the area and lots of wealth, so I guess it's a good thing for as long as it will last. And who knows how long that will be?
 

HOSS

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backhoeboogie":1uymy3k8 said:
Forget that 12.5%. Get 25% or tell them to get off of your land. Go ahead and ask for atleast $5K an acre chum money too. They call it "bonus money" but it is chum money. They will raise the chum money and try to get you to sign for a lower royalty. Don't fall for it.

Most everyone now calls it mail box money now Hoss. Checks from Sunoco, RidgeRock, Chesapeake, Quick Silver, XTO, Carrizo, Berkshire etc. Some are piddly and some are way up there.

I thought the Barnette Shale was great until I found out about the Haynesville. That is better than winning the lotto.

$400 per well per month is nothing to get excited about. $1200 per acre per month when gas was high.

There are lots of fools who couldn't wait to sell the family farm who are crying in their beer right now.

backhoeboogie, he is getting 400 bucks per DAY from each well. With his soon to be 4 wells he will make $1600.00 per day in royalties.
 

Lammie

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yes, that's not to be taken lightly. Get an attorney.
 

backhoeboogie

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HOSS":3siggrcj said:
backhoeboogie, he is getting 400 bucks per DAY from each well. With his soon to be 4 wells he will make $1600.00 per day in royalties.

There are some poor old cedar hackers and widows drawing twice that. These folks have been farming all their life and most of them existed on very little. Their lives are pretty much just like the Beverly HillBillies. 6 figures every month.

If that fellow was on 1/4 (25%) instead of 1/8 (12.5%) his mail box income would be doubled. Think about it. He'd be doing six figures every month just like these folks around here.

Hoss if you have petro under you, this aint something to play with. I would do my very best to help you in every way but the best thing for you to do is get legal help from someone who knows the laws in your state. My wife's holdings in Louisiana are totally different than her or my holdings here. The laws are different.
 

Brute 23

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Probably old shallow wells. I wouldn't get too excited, just my opinion, based on my experience around here.

Alot of times small companies will go in and re-enter these old wells that were plugged back then and try and get a little some thing out of them.

In wells like that if you don't have a clear history on them there could be a list of problems so the O&G companies arent going to pay much in lease money and stuff like that, there is alot of risk for little return. Its kind of like, the hole is there, so they will check it out. If there is still some thing every makes a little, if not the O&G company isn't out alot.

THose wells would have to do REALLY well to inspire them to drill on your place.
 

TexasBred

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HOSS":1a61bx69 said:
I was wondering if anybody on the boards has natural gas wells on their property. There are some wells a couple of miles from me that have been capped since the late 70's due to something going wrong with the shafts. The landowner is discussing the repairs and operation with a gas drilling company. I am curious if my land might be sitting on top of some NG reserves.

Has anyone ever dealt with a gas drilling company? What type of deals do they have for exploration? Is there any geological features that hint of gas reserves underground?

I had a co-worker who has land in Kentucky. He has 3 wells and is drilling a 4th. I should say the gas company is. Anyway they pay him 12.5% royalties. That worked out to be $400.00 per day per well. That is why he is no longer a co-worker.......at 1200.00+ per day he don't need to work. I can't get hold of him to ask these questions so I hope there is some experienced folks on this board.

Will the gas companies do the exploration at their cost if it is believed that there is a good chance that gas may be located under the property?

HOSS, if they come a knockin' send them to your oil and gas attorney's office. ;-)
 

1982vett

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Brute 23":13ksgb7k said:
Probably old shallow wells. I wouldn't get too excited, just my opinion, based on my experience around here.

Alot of times small companies will go in and re-enter these old wells that were plugged back then and try and get a little some thing out of them.

In wells like that if you don't have a clear history on them there could be a list of problems so the O&G companies arent going to pay much in lease money and stuff like that, there is alot of risk for little return. Its kind of like, the hole is there, so they will check it out. If there is still some thing every makes a little, if not the O&G company isn't out alot.

THose wells would have to do REALLY well to inspire them to drill on your place.

One thing about the old depleted fields, the easy money and oil have been made. Doesn't mean their isn't oil that one day will be economical to go after. The majority of wells around here mostly produce in the 7000 - 9000 feet range but they are now taking another look around 20,000 feet. Recent drop in crude prices will push out development until it returns to a profitable range. Same thing happened in the mid '80s and early '90s when oil dropped from $25 down to $8. Crude got so cheap they started abandoning and plugging wells. Late '90s they came back, released, re-pooled and started drilling again. When it got to $70 last year, the work-over rigs and drilling rigs were back. Since oil has gone back thru $80 they have disappeared. When crude prices don't support production cost they will leave it in the ground till the time arrives that prices will support production.

Funny thing about slow and steady. If you own 1/8 of a well producing just 10 barrels a day. when oil was $140 a barrel, the owner of that 1/8th would gross $175 a day x 30 days a month = $5250. I'll guarantee, no matter how small the check, I bet you would cash it.
 

kenny thomas

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A lot of the companys here are now drilling directional wells. Going 10,000ft from the point where the rig is set up, in 4 directions. Who is getting paid and how do you know if they are drilling under your property?
They are trying to get lease for 1/8th and only offering $5 per acre first year and $1 per acre each year after. I will not sign but many have.
 

Jogeephus

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Hoss I don't know anything about gas or drilling but if you need some help spending $1200+/day I can put you in touch with my X. If anyone can do it I know she can.
 

Brute 23

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1982vett":38l9mgwn said:
Brute 23":38l9mgwn said:
Probably old shallow wells. I wouldn't get too excited, just my opinion, based on my experience around here.

Alot of times small companies will go in and re-enter these old wells that were plugged back then and try and get a little some thing out of them.

In wells like that if you don't have a clear history on them there could be a list of problems so the O&G companies arent going to pay much in lease money and stuff like that, there is alot of risk for little return. Its kind of like, the hole is there, so they will check it out. If there is still some thing every makes a little, if not the O&G company isn't out alot.

THose wells would have to do REALLY well to inspire them to drill on your place.

One thing about the old depleted fields, the easy money and oil have been made. Doesn't mean their isn't oil that one day will be economical to go after. The majority of wells around here mostly produce in the 7000 - 9000 feet range but they are now taking another look around 20,000 feet. Recent drop in crude prices will push out development until it returns to a profitable range. Same thing happened in the mid '80s and early '90s when oil dropped from $25 down to $8. Crude got so cheap they started abandoning and plugging wells. Late '90s they came back, released, re-pooled and started drilling again. When it got to $70 last year, the work-over rigs and drilling rigs were back. Since oil has gone back thru $80 they have disappeared. When crude prices don't support production cost they will leave it in the ground till the time arrives that prices will support production.

Funny thing about slow and steady. If you own 1/8 of a well producing just 10 barrels a day. when oil was $140 a barrel, the owner of that 1/8th would gross $175 a day x 30 days a month = $5250. I'll guarantee, no matter how small the check, I bet you would cash it.

Yes a total different company could come in and try to drill deep, but the company re-entering those well has nothing to do with that. Like I said if they are kind of shallow the company re-entering may only lease from surface to 6K, then no one may have a lease from 6K to 10K, then another company has from 10K down.

YOu have to base what your lease money off of what is going on. Shallow re-entry wells don't pay in lease money like some one going after stuff at 20K, or like stuff in the Barnet Shale, or Lousianna. With the way they pull wells now, most shallow stuff doesn't last long so they will not pay for that like what they will pay for an area where they can lay out horizontal.

Kind of off the subject but, I have some wells right now in an area that are around 10K and they are laying out horizontal for around 2K ft or so. There will be two wells on one location maybe 30-40yds apart, one may lay out toward the east, and the other toward the west. The first ones that came on like that were making about 600-800 barrels of oil each and probably around 6mil in gas. We have a compressor that pulls off the three phase seperators and produces a million in gas alone. Can you imagine if they were on your place? :eek:

One location we actually went in and drilled right next to an existing well of another company, same loction. We went down to 10K and their wells were producing around 8K I believe. Made a good well.

Its funny now though because the people in that area are starting to set their standards pretty high. Have another well not far from the ones that were making all that oil and it was producing about 2 mil, choked back, and 100 bar. of oil a day (still a good pay check). But I talked to the land owner and he was like, "well I guess these aren't like the ones across the road huh? some people just have all the luckm, going on and on about it." He has like 3 wells make 2mil gas each, around 100 bl. of oil each and still complaining they didn't turn out like the others. :eek: It blow my mind because there are people who would kill to have one well that produces half of what his do. Kind of make me sick... :( :)
 

Alberta farmer

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In Alberta the provincial government owns most of the mineral rights. The exception was every other section within 25 miles of the railroads which was given to the companies to pay for the line. The railroad companies in turn sold the land to recover their costs and for a very short time let the mineral rights go with it. Therefore a few people own their mineral rights...almost all of them owned the land between 1886-1907.
The going rate for royalties on "freehold land" is between 15% and about 20%. On top of that the oil company needs to negotiate a surface lease with the landowner. This includes an initial payment plus a yearly rental.
Conventional wells in central Alberta are usually 6000 ft. or shallower. Anything deeper is usually sour. The latest thing is coalbed methane which is shallow 700 ft. to 3000 ft. The coalbed wells don't produce a lot of gas per well but there is probably five times as much gas in the coalbed than all the conventional gas wells. This coalbed methane is very dry and needs hardly any processing. The intent is to eventually drill 16 to 32 wells on each section.
 

backhoeboogie

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1982vett":2uawwocw said:
One thing about the old depleted fields, the easy money and oil have been made. Doesn't mean their isn't oil that one day will be economical to go after.

A friend of mine (I do have one) was injecting and flushing out of the sands on an old field he took. A lot of work but profit is there.

He needed new injection wells because of channeling. The drillers messed up and had to go deeper. They hit a new pool. Each of the new wells were taking around 65 barrels a day. That was when the prices were really good. He had managed 7 wells with the RRC. Do that math.
 

backhoeboogie

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Jogeephus":1xgara54 said:
Hoss I don't know anything about gas or drilling but if you need some help spending $1200+/day I can put you in touch with my X. If anyone can do it I know she can.


Jogeephus, When you start making a few nickels, the gold diggers just start coming out of the closet. It is amazing.

Now before ya'll start getting all hot and bothered with the thoughts, just remember it works two ways. I'm sure there are just as many young studs hitting on the boss lady. The land she inherited on the Barnett Shale does quite well.
 

Alberta farmer

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Backhoe: How do those wells in the Bartlet produce? Do they last a long time? We hear a lot about the Baucus shale around here...that is in Sask,Man., North Dakota and eastern Montana. A local driller tells me they are good producing wells but very pricey. The Baucus field was discovered in the 50s but was never developed earlier because of the high cost.
In eastern Alberta they are doing a bit of shale but the wells don't last very long, about three years max. They claim the coalbed wells will last 30-40 years. In fact they think they are organically continuing to produce methane. The University of Alberta has been experimenting with injecting oxygen into the coalbed and it appears the coalbed is generating more methane from bacteria breaking down the coal! In fact some wells have come close to tripling production! Pretty exciting stuff.
 

backhoeboogie

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Alberta farmer":1lj0cirq said:
How do those wells in the Bartlet produce? Do they last a long time?

I only know what I read and from my experiences as a mineral owner. I am not a petro engineer. There are projections that go out 30 years, if you want to believe that. Some go 40 years. Some of this come from the salesmen trying to get you to sign. They'll tell you anything. They'll divide families. They simply want to get their cut and head back home out of state.

Shale extraction is new technology and right now they are only capturing about 30 % of the gas. In ten years maybe it will be 60%?

They come in strong. After about a year you are at 50 tp 60%. Then there is about a 1% decline each month. If you talk to someone a mile away, you'll get a different story.

They punch new wells around you, fracture, and your production screams back up temporary. All it means is that the wells are communicating while the bed is lifted.
 

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