If you don’t put out your nets you won’t catch any fish. AOI’s are your nets for the data that you need to profit.
Close monitoring of drilling activity is absolutely essential for extracting or preserving the mineral wealth that lies beneath our feet.
As an operator it’s vitally important that you are up –to–date and aware of activities around both your producing assets and your undrilled leased acreage.
If you’re not paying attention, bad stuff can happen. Your competitors are not sitting still, and they are most certainly NOT going to warn you when their operations affect your drilling strategies.
For example, in the map below, the operator represented by the pink well spots did not drill into the producing reservoir under its leasehold until competitors had produced 1.7 MM+ BO and nearly 100 BCF
A time series of cumulative production for these wells shows that the operator that was late to the party probably suffered depletion loss (first wells marked by pink arrows)—although they may not have been drilling where net pay was thickest.
As a mineral owner or mineral trust company with fiduciary duties to your clients, you need to be as aware as you possibly can be of any drilling activity that may impair or restrict your minerals—or your client’s—ability to produce as much oil and gas revenue as possible.
A bank customer of ours acting in a fiduciary trust capacity used DI LandTrac AOI shapefile functionality and our wellbore trajectory database to determine that a protection well should have been drilled by the lessee—as required in the lease—to protect their client’s mineral estate against offset depletion. By using this information they were able to obtain $2.1 MM in compensatory royalty for their client.
Here’s another example from Oklahoma. The lessor represented in purple may have a drill-to-protect clause in their lease which would require drilling the protection well represented by the dashed red line (unless they were force pooled). The blue dot in the lower left is a dry hole, so the lease is not HBP’d.
Use our AOI functionality to set up an early warning system to ensure that you know what’s going on—within the play, across your fence line, and even underneath you.
Latest posts by Mark Nibbelink (see all)
- How Population Decline Could Impact the Energy Industry - July 9, 2021
- The Texas Cold Snap — Where Do We Go from Here? - February 26, 2021
- A Modest Proposal for Small Operators - January 13, 2021