Activity in Millwood Township (Guernsey)

Information about drilling activity, pipelines, etc. in Millwood Township.

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Permalink Reply by Philip Brutz on April 27, 2014 at 10:13am

Here is an estimate of royalties (20% gross) for the wells in Millwood based on the latest ODNR report. 

REX J. Anderson $62 per acre, per day  

REX Guernsey    $23 per acre, per day 

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Permalink Reply by Tom on April 27, 2014 at 2:18pm

Philip,

I know you are basing your numbers off of that amended spreadsheet someone else put together, but at least for the J Anderson wells those numbers are WAY off.  Don't forget, whoever modified that spreadsheet didn't account for the NGL's.  Also the numbers don't add up based off of Rex's first 5 day production average of 1700+ boe/day

Just assume 1700 boe/day average at even $50/boe that is $85000 average per well, with a 500 acre pool for 5 wells that is $850 gross/day/acre and 18% royalty of that is $153/day/acre

The other reason I say this is, I have a very good friend at work and his in-laws are in a producing well in Carroll County. They are in the "Brunk" pool.  He told me just about 2 or 3 months ago that they were getting about $500/acre/month as their royalties.  I assume they are getting 18-20%.  But if you look at the per day output of the Brunk wells and compare it to the J Anderson wells, if we assume I wasn't lied to about his in-laws royalty amount, the numbers in that spreadsheet are so far off it's not even funny!  

Permalink Reply by Philip Brutz on April 27, 2014 at 7:48pm

You are correct I don't know how Booger came up with the dollar numbers.  I took the 5 j.Anderson wells and added them together and divided by the 503.95 unit acreage.  I then multiplied by .2 for the 20% royalty.  How would you estimate the daily income?

Permalink Reply by Tom on April 27, 2014 at 8:43pm

If the numbers Booger has in the spreadsheet are correct, that is exactly how you would do it.  But, there are no numbers for NGL's in the spreadsheet, and we have no idea if the gas and oil prices he used are accurate.  It looks like he used $4.00/Mcf for the gas and $100.00/barrel of oil.  I would be highly surprised if they were paying the landowners anywhere near that much for both of those.  But those are only guesses.

I saw another post on here about $ amount per acre for royalties and some people are posting real numbers (or supposedly real numbers).  But they are mostly leaving out important information like the actual prices paid for the product, and a lot of times well names and unit sizes.  Sometimes they are only for 1 lateral or possibly 2 in a pool.  Also, the operator and location has a lot to do with the numbers as well.  The big players like Chesapeake can throttle back the wells until they get more infrastructure in place.  But the smaller operators like Rex, need to show good production early to satisfy investors.  There are a lot of variables that we just don't know.

What I do know for sure, compared to some of the wells that I know people are getting royalties from, the Rex wells are doing very well in comparison.

Permalink Reply by Philip Brutz on April 27, 2014 at 8:51pm

My land is the next parcel to the south of J.Anderson.  I am leased with Gulfport but I would not be surprised if I get pooled into a southern drilling unit off of the J.Anderson pad.  I  would be very interested in a more accurate dollar estimate. 

Permalink Reply by evan on April 27, 2014 at 8:54pm
So would I Philip. Theres no doubt you will be in a unit soon. J Anderson put you on the map and a hot area for sure
Permalink Reply by Philip Brutz on April 27, 2014 at 9:01pm

My guess is that they will drill next spring. In our area REX seems to drill one pad a year.

Permalink Reply by Tom on April 27, 2014 at 9:28pm

It would be nice if they do go south off of the same pad, but I would be more inclined to think they will just build another pad and drill it.  I agree with Evan though, you will get a well soon enough.  This area is too hot to not get developed as fully as possible.

I expect to see within a year or two a new pad off of Putney Ridge on the East side of 513.  I suspect it to be in a position to be near the end of the Karen laterals and go southeast toward the end of the J Anderson laterals.  That is a large area in there with no coverage at this time.

For my part, I am going to be in the new J Hall pool.  I for one have no problems sharing detailed information about the royalties.  As we've all read on here so many times, knowledge is power and still some people with the knowledge and information don't want to fully share it.

Permalink Reply by evan on April 28, 2014 at 1:12pm

I'm with you Tom as soon as I get royalties I'll let friends of mine on here know exactly what they are, heck I may even email them a copy so they learn how to read the statement 

Permalink Reply by catt on April 28, 2014 at 1:21pm

Does anyone know why an oil and gas company builds a well pad and then only goes in one direction with the laterals it seems to me that at a cost of several millions of dollars for each pad; they would want to fully utilize each pad to the maximum numbers of laterals they could put on a pad. I know sometimes they run into a fault line but it seems like they are doing this  more.... i.e. Gulfport's Bolton well and Brothers well????? I think stockholders would want them to keep well pad cost down and use all the laterals they could to help on profits. But maybe I am missing something.....

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Permalink Reply by Philip Brutz on April 28, 2014 at 3:19pm

Catt, they may drill in one direction now and then come back and drill the other direction later after they secure all of the leases.  My land is surrounded on three sides by REX and on the west side by Eclipse, but I am leased to Gulfport.  So REX needs drill under me to get to the rest of their leases.  My guess is that REX and Gulfport will come to some kind of agreement and my 82 acres will become part of the J.Anderson south laterals.  Time will tell.

Permalink Reply by Philip Brutz on April 28, 2014 at 8:43pm

Here is a much larger map of the Markwest gathering lines.  Google Earth has just updated the map image.  It looks like it was from late last summer.  You can zoom in on the J.Anderson unit being fracked.

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