Wednesday, February 25, 2009
The Haynesville Shale Problem
I received an e-mail a while back from Andrew Walker of Walker Petroleum in Shreveport. With the recent discovery of the Haynesville Shale which is a rock formation containing oil and gas lying approximately 10,500 to 13,000 feet sub-surface in northwest Louisiana and East Texas, Mr. Walker has become concerned about the lease units.
Last summer, before the economy tanked, folks around here were signing leases and getting fat checks. Then the economy tanked, gas prices dropped, and no more lease deals (nope - I didn't get one.)
According to Mr. Walker's extensive research, he says the issue is that Louisiana law requires our "commissioner of conservation to prescribe units that can be drained by one well." The problem is that the lease units are being drawn up with more than one well which does not conform to state law. This opens a huge can of worms, one of the biggest being that landowners would be subject to unfair apportionment of drilling and production. It also leaves oil companies and the state open to lawsuits later on.
He is calling for a new type of compulsory unit to be drawn up that will allow multi-well, 640-acre shale units and that provides equal protection for property owners.
In a heavily researched paper that was much too long for The Times to print, Mr. Walker outlines the case of three landowners of a 600+ acre "unit." Basically, all the wells are on the land of one landowner and he is taking all the surface damage, but the other two landowners are also reaping profit with no surface damage, traffic, wells, or mess on their land. The profit is divided between the three owners of the "unit" even though one takes the hit. Not fair.
Once the drilling becomes more urban the problem will only increase.
Go here to read Mr. Walker's Times article. You can go here to learn more about the Haynesville Shale.
Mr. Walker would love to hear from anyone who might be interested in getting involved or have experience with this issue. You can contact him at fairdrilling (at) aol.com.