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Despite lower crude prices, data released by the Energy Information Administration (EIA) shows gains in production across all major U.S. shale fields. According to the International Energy Agency (IEA), only 4% of U.S. shale production needs prices above $80 for drillers to break even. 

Production growth translates into good news for mineral owners, but lower commodities prices could have a negative affect on future drilling in the coming year, if the slide continues. On October 27, 2014, benchmark crude oil price WTI (West Texas Intermediate) was $80.63. At the end of September, it was ~$93.00.

Gains in Texas

The Eagle Ford Shale in South Texas is expected to produce 1.614-million b/d of oil in November, a 29% increase from the same time last year, and a ~2% increase from October’s expected production of 1.579-million b/d.

The Permian in West Texas is expected to produce 7.765-million b/d by the end of the month. In November, production is expected to increase ~2% to 1,807-million b/d.

Gains in North Dakota and Montana

The Bakken Shale is expected to produce 1.193-million b/d of oil in November, up 22% from the same time last year. October’s total production from the play is expected to be 1.164-million b/d.

In April of 2014, consultancy Wood Mackenzie issued a report that estimated break-even costs in the Bakken based on sub-plays. Break-even rates in the Sanish basin, one of the better areas for development in the Bakken, are estimated to average $58/bbl, according to the Wood Mackenzie report. Break-even costs were higher in other areas of the play.

Texas and North Dakota, which encompasses the most active area of the Bakken, currently make up almost half of the nation’s crude oil supply. Production data sourced from the EIA’s Drilling Productivity Report.

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The Ohio Supreme Court heard arguments for the first accepted cases surrounding the state’s Dormant Mineral Act, beginning in late August, 2014. The cases under review (Dodd v. Croskey and Chesapeake Exploration v. Buell) originated in Harrison County, OH, which sits atop the Utica Shale. Depending on the decisions handed down by the Supreme Court, severed mineral interests could revert to the current surface owner for the tract(s) of land in question in these cases.

Read More: “Lost My Mineral Rights to Surface Owner”

The Ohio Dormant Mineral Act (Ohio Rev. Code § 5301.56) took effect in 1989, but underwent a substantial revision in 2006. The law governs when surface owners may regain ownership of severed mineral interests beneath their property. In the event the surface land and the minerals are owned separately, the law says mineral interests are abandoned under certain circumstances. Currently, the law requires the landowner to notify the mineral owner of the intent to re-claim minerals before establishing ownership. Minerals are not considered abandoned if certain actions have taken by the mineral owner during the 20 year time frame before the required notification.

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Chesapeake v. Hyder – Royalty Owner Wins Big

July 17, 2014

Recently, a San Antonio court of appeals affirmed the decision of a Tarrant County judgement against Chesapeake Exploration, LLC, awarding royalty owners approximately $700,000 for deducting unauthorized post-production/post well-head costs. The plaintiff (Hyder) claimed Chesapeake deducted improper fees and interests from the royalty, based on specific language in the lease agreement. The Hyder’s royalty clause was not […]

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Natural Gas Production Soars in U.S.

June 26, 2014

Natural gas production in the U.S. was the best it’s ever been in April of 2014 according to estimates from Bentek Energy, an energy market analytics company based in Denver, CO. Production for the onshore Lower 48 last month averaged 67.3 Bcf/d, which was about .5 Bcf/d higher than March of 2014 production levels of […]

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State of Louisiana Seeks to Claim Privately Owned Lands

May 23, 2014

A dispute over mineral rights ownership, originating in DeSoto Parish, LA, has now evolved into a sticky situation that could potentially impact thousands of Louisiana mineral owners. The issue specifically centers around the state’s attempt to claim ownership of certain tracts of privately owned land that have previously been traversed by navigable waterways. In January […]

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Texas Royalty Owners Have the Right to Request Information from Operator

April 29, 2014

Royalty owners living in Texas receive a mandatory letter annually from operators notifying them that they can request certain information. Section § 91.504 of the Texas Natural Resources Code provides royalty owners the right to request information about itemized deductions, the heating value of the gas, and the identification number for the lease, property or well. […]

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Chesapeake Mineral Owners See Large Deductions on Royalty Checks

March 17, 2014

Chesapeake Energy has come under increased scrutiny in recent months for allegedly defrauding Pennsylvania mineral owners. The Wall Street Journal reported in March 2014 that some mineral owners are seeing deductions of more than 35% on their royalty checks! The publication compared the royalty checks of Pennsylvania mineral owners and found that Chesapeake’s lessors had […]

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Land Owners Seeking Public Use of CO2 Pipelines in Mississippi – Video

February 18, 2014

Land owners in Mississippi are seeking public access to CO2 pipelines controlled by Denbury. The two pipelines supplying oil fields in the state are 50% utilized and land owners believe shared use could create additional value for themselves and the state. The pipelines were built employing eminent domain, but there is only one owner and […]

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Kansas Could Inact Limits on the Number of Oil Wells on a Property

February 17, 2014

A state senator in Kansas has introduced a bill that could limit the number of oil wells drilled on property in the state. A hearing to discuss the bill has not been scheduled and proposal might not be addressed until the next legislative session. The problem is magnified by surface owners that do not own […]

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ND Supreme Court Rules Missouri River Shoreline Minerals Are Owned by the State

January 29, 2014

The North Dakota Supreme Court has ruled Missouri River mineral rights found below the shoreline are owned by the state. You might not think this is significant, but the prize is about 25,000 acres and $140 million oil companies have set aside in bonuses and royalties. Development in the Bakken makes each acre significant. Waterfront […]

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