how do pump jacks and tanks work? splitting royalties?

a neighbor may sell off his property to an investment company and was told they may install pump jacks and tanks and only will need 7 acres to do that. Also, between myself and my 2 neighbors we have a pre existing  lease for our 100 acres and are currently splitting the royalties from our shallow well. Does anyone know that if any kind of well either fracking or pump jacks go in on any one the properties do we all still split the royalties.

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Permalink Reply by Brian Powers on August 20, 2013 at 2:09pm

Jim-

Fraccing cracks the rock downhole to allow the fluids to travel to the vertical section of the well. If the fluid is too dense and/or if  there is insufficient gas entrained with the fluid, a pump jack may be installed to lift the fluids to the surface.

 

All salable components (dry gas and site separated hydrocarbon liquid) are measured and sold. The unit's division order determines the percentage split of the proceeds.

 

Brian

Permalink Reply by Jim Hujer on August 20, 2013 at 2:23pm

I guess my question is does there have to be a fracking well(deep well) on the property first and then pump jacks installed and tanks?

Permalink Reply by Trapper on August 20, 2013 at 3:02pm

Where are you located? Is the well you now share producing oil? Interesting that they want to use pump jacks. It is my understanding these deep shale wells usually produce huge pressures to lift product from the depths. Any talk of storage wells to use as a reservoir to be pumpjacked into a tank farm? Interesting idea , in lieu of pipelines. Are you handy to a railroad by any chance?

Permalink Reply by Jim Hujer on August 21, 2013 at 1:10am

We are in Harrison Twp near the Cairns Well but not tapped in on a lateral yet. I really dont have alot of info to what is happening out here. My neighbor I guess had a realtor come to his house (I think it was Gateway LLC investors, out of state) and make him an offer to purchase his entire estate and said they planned on putting in pump jacks and tanks, according to him. He does not have a shallow or deep well on his property but I have a shallow well on mine that is producing natural gas. I plan on calling him back to try and get more info--does anyone have any good questions I can ask him? I am trying to learn about this whole gas/well/oil situation---ALSO does anyone know of a good attorney that deals with oil/gas please leave a name and number if do thank you.

Permalink Reply by Billy Park Whyde on August 21, 2013 at 1:54am

 Ask them why in the world would they put in a pump jack on the propery if there is no well on that property. As to a tank battery. If the property is near a road with a good loading area and a shorter route to a road than the drill sight is then that might be a possibility. But when some one is coming in and trying to buy the whole property such as your neighbors "We are in Harrison Twp near the Cairns Well" I would say get a GOOD ATTORNEY , find out what in the H is going one around you and GOMS is a good place to start as well as talking with your neighbors, a vist to the county recorders office as well.

Permalink Reply by Billy Park Whyde on August 20, 2013 at 5:11pm

Missing a lot of information to answer your question. Some older shallow wells used a different system to get the oil to the surface if I recall correctly it was a rotorary unit, so if they are just modifing the existing well with a pump jack and possible replacement tanks nothing would change. They could refrac a old shallow well but I would not be doing that. A pump jack is placed at the well head so unless they are driling a new well it sounds as if they are doing a bit of rework.

Permalink Reply by Paul Martinelli on August 21, 2013 at 6:23am

Going on the limited information....

 

you will get your share of  royalties based on the acres you own in a drilled unit....doesn't matter how they get it out of the ground.

 

As for the pump jacks....perhaps they are using the land they intend to purchase for some staging area.

 

Permalink Reply by Billy Park Whyde on August 21, 2013 at 6:37am

 A staging area would not put you into a new unit. Time to get your old lease out, read it close and pay the recorders office a visit. It is possible your lease has been reassigned without your knowledge.

Permalink Reply by Jim Hujer on August 21, 2013 at 1:37pm

What is a staging area? We are collecting royalties right now on our shallow well with the current lease from 1980 so how can my lease be re assigned without my knowledge because the well and lease is on my land? Does anyone have info on Gateway LLC?

Permalink Reply by Billy Park Whyde on August 21, 2013 at 3:11pm

  A staging area is one for equipment possible vehicles much the same as a staging area for a parade or war time where a large supply of materials is gathered before an invasion. 

  Depending on how a lease is written (in most cases older leases are pretty much what ever the O&G company wants to do) In a lot of cases they can sell the well to another party, maintain ownership of a well and the formation it is in and assign deeper formations without your knowledge. 

 That why you need to visit the County Recorders Office that has your lease on file and will show if it has been reassigned. 

Permalink Reply by Jim Hujer on August 22, 2013 at 12:37am

Ok, will have to pay them a visit, thanx for the information.

Permalink Reply by Billy Park Whyde on August 22, 2013 at 12:58am

What GOMS is for. YW

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