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Old 11-07-2007, 02:34 AM
 
Location: Las Vegas
13,432 posts, read 24,199,022 times
Reputation: 24745

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I inherited some mineral rights in Texas. I currently have 2 pumping wells producing gas and oil. Don't get any visions of Southfork here, it's amazing how little money I actually receive. I'm trying to learn how this works and figure out how to make more money from the leases.

It's my understanding there has never been a 'dry hole' on these leases so why aren't there more wells or more companies willing to drill? With oil at almost $100 per barrel, shouldn't it be feasible to drill in the US rather than importing most of what we use?

Where would one go for expert advice on this? Any insight would be appreciated!
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Old 11-07-2007, 09:33 AM
 
Location: WA
5,292 posts, read 20,697,476 times
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Quote:
Originally Posted by yellowsnow View Post
I inherited some mineral rights in Texas. I currently have 2 pumping wells producing gas and oil. Don't get any visions of Southfork here, it's amazing how little money I actually receive. I'm trying to learn how this works and figure out how to make more money from the leases.

It's my understanding there has never been a 'dry hole' on these leases so why aren't there more wells or more companies willing to drill? With oil at almost $100 per barrel, shouldn't it be feasible to drill in the US rather than importing most of what we use?

Where would one go for expert advice on this? Any insight would be appreciated!
It has always been an expensive risk to drill for oil since the odds are low that it will produce enough (at reasonable ongoing production costs) to cover the exploration. Adding to difficult economics are strict environmental regulations that add enough costs and potential liability that major companies are not interested in stripper wells.

Small oil companies often service stripper wells but I expect it still takes good economics and clear ownership (who owns the property and the balances of the leases) to attract investment which the owners will have to participate in.
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Old 11-07-2007, 12:44 PM
 
Location: Hougary, Texberta
7,827 posts, read 10,349,004 times
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I agree with the previous poster. I think you need to realize that it costs in the neighbourhood of $1M to drill a basic well. You need to hit some pretty serious production to make it viable to do. You also need to factor in the costs of tying the well into a pipeline, where the production facility is, if that particular pipeline is running at capacity, etc. etc. etc.

It also may be a factor of they are already accessing all the production due to the formation shape. More wells doesn't always equal more production. If the well is flowing without stimulation, they'll just take what comes naturally. See cost model above.

It's no where near as simple as punching a hole in the ground.
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Old 11-07-2007, 08:29 PM
 
Location: Tucson, AZ
2,161 posts, read 7,482,982 times
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Right now in the "lower 48", land based drilling activity has increased a lot in western North Dakota, north east part of Wyoming and eastern part of Montana. With $90 dollar oil, the economics of drilling for "dinosaur juice" at home are looking a little better. There's always offshore drilling activity going on in Gulf of Mexico, but now they are using deep water drilling ships that are super expensive to drill with. Aside from those areas, I can't think of any other places in USA where significant new drilling is going on.
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Old 11-07-2007, 09:05 PM
 
Location: Las Vegas
13,432 posts, read 24,199,022 times
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Thanks everyone! I guess I'll just keep paying taxes on it. Maybe someday it will be worth something.

I get 8 or 10 offers a year from people who want to buy the mineral rights but I'm not selling.
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Old 11-08-2007, 10:22 AM
 
Location: Hougary, Texberta
7,827 posts, read 10,349,004 times
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Don't forget there is such a thing as horizontal drilling. Just 'cause you won't sell doesn't mean your neighbour won't.

And the horizontal part can stretch out for well over a mile from the well.

If you're a fan of the Simpsons, look what happens when you cross Mr. Burns
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Old 01-21-2009, 04:50 PM
 
1 posts, read 6,181 times
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Default Read the fine print of your lease




Quote:
Originally Posted by yellowsnow View Post
I inherited some mineral rights in Texas. I currently have 2 pumping wells producing gas and oil. Don't get any visions of Southfork here, it's amazing how little money I actually receive. I'm trying to learn how this works and figure out how to make more money from the leases.

It's my understanding there has never been a 'dry hole' on these leases so why aren't there more wells or more companies willing to drill? With oil at almost $100 per barrel, shouldn't it be feasible to drill in the US rather than importing most of what we use?

Where would one go for expert advice on this? Any insight would be appreciated!
Yellowsnow,
Join the club, thousands of Texans should be wondering the same thing. The only people seemingly to get the money are those with the leases held in hand that were sealed years ago...a piece of paper signed maybe by your grandparents or some other trusting soul who believed the salesman coming around to get oil leases. Those people didn't read the contract, were given what amounted to a grand sum of money for those times and the salesman tied up their property, lock, stock and barrel for prices unbelievebly unjust for these times. Who could have imagined $100 plus for a barrell oil?

Those salesmen are still getting their share today. Do you wonder why so much land is lying idle from being explored for oil today. The land owners finally figured out that they don't profit from oil found on their lands and don't lease. Maybe their neighbor let an oil rig on the place but the money didn't find its way into their bank account and the "royalties" are ending up in contracts with little words such as "forever" or "lifetime" or "99 years" tucked in the wording of the contract thereby haltering any landowner for just recompense for land he owns.

And worst yet, any action by you towards the royalty holder, well they have deep pockets with lawyers just sitting around. Got the message yet!! So we are dependant on foreign oil while faulty leases are tying up thousands of Texas and American land.

Google oil royalties and leases and read about how many oil companies are not paying royalties for publically owned land and not paying these royalties into the public treasuries.
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Old 01-23-2009, 08:59 AM
 
Location: Visitation between Wal-Mart & Home Depot
8,309 posts, read 33,322,966 times
Reputation: 7038
Quote:
Originally Posted by yellowsnow View Post
I inherited some mineral rights in Texas. I currently have 2 pumping wells producing gas and oil. Don't get any visions of Southfork here, it's amazing how little money I actually receive. I'm trying to learn how this works and figure out how to make more money from the leases.

It's my understanding there has never been a 'dry hole' on these leases so why aren't there more wells or more companies willing to drill? With oil at almost $100 per barrel, shouldn't it be feasible to drill in the US rather than importing most of what we use?

Where would one go for expert advice on this? Any insight would be appreciated!
Be wary: It's pretty thick in here. I see a lot of very uninformed and sometimes patently false statements being tossed about.

There are countless nuances in oil & gas exploration and there is no way to know why a property hasn't been drilled to saturation without a lot more information.

Small royalty checks are generally symptoms of small mineral interest, small unit representation, high transportation/water disposal fees and/or flagging production. More recently, low prices have come into play as well.

Contrary to popular belief, a big, bad oil company can not drill "horizontally*" from your neighbors property onto yours with the intention of producing your minerals without a lease from you. To do that would be inviting litigation of the highest order and of the greatest consequence.

It is certainly true that there are some very unscrupulous, dirty people handing out unequitable deals to unsophisticated landowners, but it really is your responsibility to educate yourself about what you own, where it is, and what the fair "price of poker" is in your neck of the woods.

DM me if you have any questions and I will be more than happy to answer them if I can.


*Horizontal drilling has very specific applications, for example drilling shale plays or tight sand plays. The word we're probably looking for is "directional", which simply means that the wellbore is purposely deviated in a specific direction
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Old 03-28-2009, 06:31 PM
 
13 posts, read 21,294 times
Reputation: 10
Default bassfish

I have some minerals inherited from my father. I have not previously looked into this. There is activity on the west side of the county they are in, and from a map observed today, some may be nearer. I have googled some companies and information.

I am interested in general info, any leads or ideas.

I am new to this forum.
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Old 03-28-2009, 06:58 PM
 
48,519 posts, read 80,998,062 times
Reputation: 17978
Well for one thng since the crash in teh 70's there are really limited rigs since them and not alot of oil mean leaft from those days. Then think why thwey are going to the expense of offshre prodcution;because production on land is really limited. Drill alor t of weells on a limited field only means it will run dry sooner.No massive fields like in the past.
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