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Started By
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re: Carbon storage
Posted on 5/29/24 at 8:57 am to RaginRampage
Posted on 5/29/24 at 8:57 am to RaginRampage
quote:
The companies we talked to said it would make exploratory drilling much more costly and not worth it. But in developmental drilling, you know what the revenue v. costs will be, so they can design for it.
Makes sense. Yeah, you’d probably avoid an exploration type deal and not spend that extra money on drill design with the risk of drilling a dry hole.
0
Posted on 5/29/24 at 8:58 am to HeadSlash
quote:
Why store something that nature naturally converts to oxygen?
Well, my bowels are a carbon capture device and I can assure you there's very little oxygen involved.
Posted on 5/29/24 at 9:05 am to Joe_Dirte
quote:
lawyer or landman take a look
I imagine the company has a landman firm approaching them, and not the company dealing with the landowner directly. I would get a different landman firm/lawyer to represent you, not just trust everything their representation is saying. They only get paid if they close the deal!
quote:
assuming they want to drill an injection well on your property
I doubt the well will be on their actual property. The company is likely leasing their underground pore space. 20 acres is not much. There is likely several other land owners in the area that are also being leased, then they will be pooled together into something similar to a "Drilling Unit". If the well would be on their property, they would be dealing with a surface lease, which has an annual rental, with some sort of increase per year for inflation, as long as O&G activity is ongoing.
In O&G, if you refuse to lease, and the operator forms a unit with your acreage, you will be "force pooled" and have to share a proportional share of the drilling cost, and be treated as a partner. I would be curious of the repercussions if you were to do this on an injection well, if the results are the same.
This post was edited on 5/29/24 at 9:09 am
Posted on 5/29/24 at 9:23 am to RaginRampage
quote:
In O&G, if you refuse to lease, and the operator forms a unit with your acreage, you will be "force pooled" and have to share a proportional share of the drilling cost, and be treated as a partner.
In Louisiana, though, unless some other states, I believe you have to have at least 80% of the mineral interest within the unit leased, or else you may have drilled all the mineral servitude owners a free well. Oops!
quote:
I would be curious of the repercussions if you were to do this on an injection well, if the results are the same.
Due to HB 661 passed in 2009 Regular Session, then singed into law as Act 517, there is supposed to be a process for expropriation of pore-space for an underground CO2 storage complex.
Now…whether the LA DNR had figured out 15 years later how in actual practice such a process would be initiated and carried out…who the hell knows.
Your advice about getting separate representation by somebody familiar specifically with sequestration agreements and the process is something OP definitely needs to adhere to.
This post was edited on 5/29/24 at 9:25 am
Posted on 5/29/24 at 9:38 am to Macavity92
quote:
RaginCajun03
Thank you
Posted on 5/29/24 at 5:57 pm to kftiger1
we were approached but did not do a deal...the initial offer was:
$350/acre (not a joke) for lease consideration (i.e. signing bonus)
a primary term of 10 years during which we'd get $75/acre annual lease payment until injection commenced
once injection starts, $1.50/metric ton CO2 injected
hope that helps
$350/acre (not a joke) for lease consideration (i.e. signing bonus)
a primary term of 10 years during which we'd get $75/acre annual lease payment until injection commenced
once injection starts, $1.50/metric ton CO2 injected
hope that helps
Posted on 5/29/24 at 6:37 pm to ragincajun03
Maybe this is a dumb question, but how will this effect the sale and possible development of land in the future? Would there be restrictions on development?
Posted on 5/29/24 at 6:40 pm to HeadSlash
quote:
Why store something that nature naturally converts to oxygen?
Plants use CO2 to make food. Oxygen comes from splitting apart H2O.
Posted on 5/30/24 at 7:45 am to LegendInMyMind
quote:
Maybe this is a dumb question, but how will this effect the sale and possible development of land in the future? Would there be restrictions on development?
I don’t think it’s a dumb question at all, because to be honest…no one knows. Carrying out projects like this on such a large scale is in its infancy.
I will say this, people have homes and shops on land that has CO2 flooding for EOR oil & gas operations right under. However, it’s not like your suburban or RiverRanch type housing.
For the most part, it seems the smart companies wanting to get involved in these projects have shied away from highly populated regions or potentially high dollar development properties, at least along the Gulf Coast. They instead done deals with big timberland property owners, ranches, etc.
Of course, Air Products really stepped into a shitstorm doing a deal with LA DNR to store CO2 under Lake Maurepas.
Posted on 5/30/24 at 7:47 am to jlsufan
quote:
primary term of 10 years
Wow.
What part of the country, if you don’t mind sharing?
Posted on 5/30/24 at 8:40 am to ragincajun03
Louisiana
Posted on 5/30/24 at 8:48 am to RaginRampage
quote:An unleased mineral owner in La does not have to participate in drilling costs but will not get revenue until after well payout. Once the well pays out the UMI owner will usually begin receiving (monthly) revenue and expense charges via JIBs (joint interest bills) related to the UMI.
In O&G, if you refuse to lease, and the operator forms a unit with your acreage, you will be "force pooled" and have to share a proportional share of the drilling cost, and be treated as a partner.
Pertaining to the OP, no way I’m encumbering my property for this carbon shite esp for 10 yrs. That deal doesn’t pass the laugh out loud test.
This post was edited on 5/30/24 at 8:50 am
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