Well, this is certainly an interesting development and a lot of...

Well, this is certainly an interesting development and a lot of theories are bouncing around as to what is actually going on. The thread on Yahoo that Study has refered to is definitely worth a read. For those that can't I've cut some of the best quotes below. The original post by Zoombee that started the thread was cut by raeban and posted on FP's American Bulls thread. The best replies are listed below:



Posted by Willallin

Zoom

I think you are reading something into this that is not there. I believe that these wells are including a portion of Samsons retained acres. On these situations all mineral rights holders have the option to participate in the well but must pay their share of costs. if the do not pay then they do not participate in the production from the well

This is not a JV per se it is simply the well operator making notification to all interest holders in this piece of property.




Posted by jpat1782

From Zoom's thread...
>>If Samson elects to accept and work with Chesapeake in the Operational support drilling to the CODELL Sand formation and the orientation as well as the formation of the Horizontal this effort would be considered a �JV�. So this effort is a wee-bit larger opportunity that one may imagine at the first reading of the press release. Samson would be a JV with Chesapeake and would have a WI of either 12.5% or 25% on the CODELL Sand formation wells.<<

My opinion is ... SSN need to de-risk Hawk Springs area to move forward with 99.5 % confidence in the acreage being commercially viable. The two wells of CHK on the South border and the one with HAL on the North will be a hugh step in that direction. Obviously the more boundary wells that are drilled on the acreage, the more we can understand the where the flow ranges of the Codell and Niobrara lie. This will be a sampling map we are creating here and it is just the beginning of a very exciting play.




posted by Willallin

Goldie

What you need to consider is that mile long laterals do not always conveniently fit on the operators own lease. However the operator gets to determine the placement of and direction of the lateral. As Dlotto has pointed out there is a huge rush to get wells permitted. A part of this is the operator or holder of the majority working interest gets to determine the well layout.

In this case I believe the well is including property controlled by Samson. Samson is entitled to participate in the well and receive production from the well equal to their property contribution.However to gain the right they must contribute their share of the cost of the well.

In this case Samson must decide if they feel the well will be profitable. They are in an excellent position to do so as they have the 3D siesmic. Additionally if they participate they get access to the drilling information which can then be compared to the siesmic giving valuable info going forward.



posted by jpat1798

Winn....tell me if I am understanding you correctly... Whomever gets their permits first and has majority holdings in a leased area gets to determine the direction of the horizontal? So if CK permits a well and drills it right next to SSN's leased 640 space.. then CK can run a horizonal through and into the SSN's acreage? Thats like me drilling next door to you and running a pipe under your house to get your well water.. because my land is dry. Is that what I am reading or is their something I am not getting here?


posted by Willallin

I am hoping someone more knowledable pipes in soon but what I believe they are doing is applying to drill based on 640 acre spacing. Say Dlotto sells lease leases on his 500 acres to Samson and the Neighbor sells his 140 acres to Devon but they are both part of the section you have two lease holders each with a working interest based on percentage of ownership. One becomes the operator




posted by Willallin

Goldie

A little further info. Spacing units are based on official government 640 acre sections for Wy. Any one with lease rights in the section becomes part of the well with the operater determing the final layout of the lateral


A temporary six hundred forty (640) acre spacing unit, consisting of the governmental section in which the horizontal well is located, is established for the orderly development of the anticipated pool; and
(vi) In addition to any other notice required by the statute or these Rules, notice of the Application for Permit to Drill (APD) a horizontal well shall be given by certified mail to all Owners within the boundaries of the designated temporary spacing unit.




Interesting

Cheers OMR