Geology Question. Is it possible to have both Wet Gas / Dry Gas and Oil? Both Plays

After looking at numerous maps....and the fact that some of these shales appear to overlap....my question is...

Can you have 2 plays?   Both Gas and Oil?

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Permalink Reply by Billy Park Whyde on February 5, 2012 at 5:18am

Your Topic is three different plays and then you reduced it to two.

  But your question is kind of  loaded in a way. A oil well in a oil formation that has all three has already happened such as the Harrison well in Ohio. The well came on line with 9.2 million cubic feet of gas per day and if I recall almost a 50/50 mix of oil and wet gas (I stand to be corrected) but it was I think about equivalent to 3000/bbl a day. 

  The ratio of what a well will produce in  the three however I believe will differ upon location.  Hope that helps.

Permalink Reply by Melissa on February 5, 2012 at 12:38pm

Yes....I just didn't realize that you could have all three....

I am to assume that the different plays come from different shale or layers?

Permalink Reply by Billy Park Whyde on February 5, 2012 at 1:06pm

You are correct The Marcellus,  The Utica, The Eagle Ford (in Texas)  for examples  sometimes also called by formations.  The Marcellus over rides the Utica so it would be possible to drill at different levels from the same pad if it was  a good show. On the way down a hole samples are taken as the well progresses and they examine  the samples. They might just go through say the Clinton formation and have a real good show which will be noted in case they would want to  drill into that formation for example. Over the next few years at least in my area of Ohio we will see Berea wells  (shallow about 500' to 800' with very small pump jacks, Clinton Wells with  larger pump jacks as the wells are down around 3,200' then the biggies. 

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on February 5, 2012 at 1:26pm

Billy,

If they do also find oil and are scheduled to drill for NG...do they sometimes just overlook the oil as a reserve for later?   Or do they see it as more viable to drill for oil first instead cause of oil prices?   or both at the same time?

Also do you know if they have to report to anyone in the county (permit, etc.) if they discover oil?  How would the Lessor know?  I guess I also wonder if they need to amend the contract for various clauses if they do discover oil.

that's a good question Melissa...thanks for posting it.

Permalink Reply by Billy Park Whyde on February 5, 2012 at 2:28pm

I brought data up on my 3 wells using the Maps BICS brought us I only have one of them in production and the other two were plugged. I saw were they recorded depths and in one well they put 1bbl when the went through the Berea here.  The well came in at a recorded 200,000 CF/day and 20bbl / day.  It was a Clinton well vertical drilled and fracked.  I do not know if regs changed on recording the data.

  To the first part I really don't know the answer. But there have been recorded kick backs where gas pressure caught a few rig hands by surprise, with gas pressure that high (although possible a small pocket they would study it)  My guess is with oil prices and the wet gas proves that would probably dictate there iptions.

Permalink Reply by JBM on February 5, 2012 at 4:33pm
Do the negotiations include access to the Utica Shale or only the Marcellus?  I noted that some are seeing the Utica as a separate opportunity from a leasing standpoint.  In addition the Utica could potentially contain more liquids and possibly some oil. Either would be higher in value than dry gas. Rex has apparently completed a successful Utica gas well near Muddy Creek in Butler County.
Permalink Reply by Billy Park Whyde on February 5, 2012 at 4:40pm

You can layer a lease with more layers than a wedding cake if you want to.  In old leases it was a blank check for ALL not these days! You only sign a lease when you know exactly what your doing and even then get an attorney to go over it first! 

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on February 5, 2012 at 5:45pm

so true...

When all the leasing in the Marcellus started most people didn't know what shale was and that there were other layers...and guess who knew that most people wouldn't know?

Pls review the GRANT clause in any contract and specify just what is being assigned by your signing.

Many signed what Billy called a blank check in the GRANT clause and so they don't realize it til they learn from others that they could lease per parcel, lease per shale name, etc.

Permalink Reply by Melissa on February 5, 2012 at 6:36pm

That would be what happened to us.    Approached 17 months ago.......nothing really happening....hired an attorney.....ended up with a dud lease.   1500 per ac.  15 % of Net and basically all gas / oil.   5 year renewable.  It almost makes you sick (literally) to know that you signed over what you worked so hard to have for peanuts of what everyone else is getting. 

0l1a6laz7smpfPermalink Reply by 0l1a6laz7smpf on February 5, 2012 at 6:55pm

Hi Melissa...what is really disappointing (at least so far) is that '5 year renewable' really was made to sound like 5 year renewable...til I joined this forum and found that there are clauses that extend that 5 years to almost indefinite with no hope for another sign up bonus ...so all we can hope for is royalties as the contract has a shutin and delay clause that promises a mere $5 per acre PER YEAR!   Hope for royalties.

Permalink Reply by Billy Park Whyde on February 5, 2012 at 8:06pm

I had to reply to this as I saw it where a ban on drilling was passed and a landowner supported it. It will probably make you feel better Melissa.

I posted as John Paul Jones there

http://www.washingtonpost.com/national/health-science/with-deep-con...

JohnPaulJones

1:59 AM EST

Think about this. "“Pablo made the right decision” to oppose drilling, said May, who leased more than 1,000 acres and gets $1,400 yearly from Carrizo" I could understand why! In other areas such as Ohio land owners are being paid in some cases over $5000 per acre for a five year lease! This guy by his own free will leased that property of his for a little over a dollar per acre per year! So he is against drilling now, or does he hope he can get out of the lease and have the ban overturned in the future to really cash in. FIVE MILLION DOLLARS IN ONE CHECK for a five year lease and with 1000 acres he might even get more. FIVE BIG MILLION DOLLARS IN ONE CHECK!

Permalink Reply by dr j on February 6, 2012 at 4:30am

This is one of those cases where you have to give yourself a break ( and some peace of mind) and realize you made the best decision you could with the information you had at the time.   The fact that others are getting more now, when there is more info is an excellent indicator that royalties will be significant.   If things had gone the other way,  those getting more now may have gotten nothing at all, and you would be the genius.   

As far as the different stratas - I know one large leasing group originally signed a lease for only  the Utica.   I thought that was a great idea at the time but the more I have learned about drilling and way it progresses/commences I am not sure I feel that way any longer.   I think depth clauses are probably a better idea.... for example "everything below 3000'"  of everything from 3000 to 9000 or the like.    I think in some circumstances those strata leases while protecting you in the future may hinder you in an active drilling present.  

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