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This event hosted by NHALP covers topics such as drilling allocation wells, production sharing agreements, and recent industry developments.
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Allocation Wells & PSA Permitting/Drilling North Houston Association of Professional Landmen December 11, 2018
AllocationWells&PSA Permitting/Drilling ►Panelists: ►PhilipJordon–Crossing Rocks Energy, LLC ►KelliKenney –McElroy,Sullivan,Miller Weber,LLP ►ShandyRobl–BPXEnergy ►Luke McCarley – Riviera Resources, LLC ► Moderator:Paul Yale – Gray Reed
Who is DrillingPSAWells? As of07/12/2018 (ThankstoBrianSullivanofMcElroy,Sullivan,Miller,Weber&Olmstead,L.L.P.)
Who is DrillingPSAWells? (ThankstoBrianSullivanofMcElroy,Sullivan,Miller,Weber&Olmstead,L.L.P.)
Who is DrillingAllocationWells? As of07/12/2018 (ThankstoBrianSullivanofMcElroy,Sullivan,Miller,Weber&Olmstead,L.L.P.)
Who is DrillingAllocationWells? (ThankstoBrianSullivanofMcElroy,Sullivan,Miller,Weber&Olmstead,L.L.P.)
DiscussionQuestion ►ProductionSharingAgreementsvs. AllocationWells ►Whataretheadvantagesand disadvantages of each?
DiscussionQuestion ►Havetherebeen anynew casesof note sincetheKlotzmancase?
DiscussionQuestion ►Are companiesusing productionsharing agreements,pooling agreements,or relying oncaselaw forcalculating royalties?
DiscussionQuestion ►AreAllocationWells thenew pooling,i.e., do theyeliminatetheneed for pooling?
DiscussionQuestion ►Whatmethodsareoperatorsmost frequentlyusingto accountto royalty ownerswhendrillingallocation wells? ► lengthoflateral ► numberof perforations ► surfaceacres ► othermethods
DiscussionQuestion ►Howto handleallocationwellsthat cross differentJOA contractareas? ►AmendJOA ►Allocateproductionbetween JOA contract areas,and if so,wherein theJOAis supportinglanguage, andwhatis theriskof notbeingable toenforcenon-consent penalties.
DiscussionQuestion ►Are recentlandownerleaseforms addressingallocation wellsby either preventingorby encouragingthem? ►Examples?
DiscussionQuestion ►Those pesky non-perforation zonesand Rule37 issues. Howareoperatorshanding thesesituations?
DiscussionQuestion ►Are therebetteror moreaccurate measures of productionfromeach tract? ►Specifically,whatabout theuseoftracersto determinethepercentageof production fromeachperforation?
DiscussionQuestion ►You cashcallthewellparticipantsfor the costof an allocationwellbasedon the lengthof theproposedlateral, but the lateraldoes not reachtheproposedlength, and asaresult,howwouldyouhandlethe accountingto “true-up” thedifference in costsbetween theproposedlateralandthe actualas-drilledlateral.
DiscussionQuestion ►Multi-tractAllocationWells: ►Are surfaceeasementsneededdown the entirelateral(acrosseachtract)? ►Are saltwater disposalagreementsneeded forproducedwastewateronsurface locationtract?
DiscussionQuestion ►Are subsurface easementsnecessary? ►In relationto surfacedrillsites andoff-lease drillsites.