Differentiating gas wells from oil wells
Posted on Monday, September 1st, 2014 at 2:05 pm
When trying to sell your mineral rights, it is important to determine whether the wells on your property are technically classified as oil or gas wells. People may use these terms for their wells interchangeably because they often produce both. However, failure to correctly differentiate between the two may cause profound economic consequences, from well spacing issues, pipeline company prioritization, to the possibility of severing ownership in some areas of Texas.
Because wells often contain a mixture of oil and gas, provisions of the Texas Natural Resources Code clearly makes a distinction based on the ratio of each element. The Code defines an oil well as a well “that produces one barrel or more of oil to each 100,000 cubic feet of gas.” On the other hand, a well that produces pure natural gas with no oil, or produces more than 100,000 cubic feet of gas per one barrel of oil is considered a gas well.
To learn more about the legalities of mineral rights, consult with our team in Austin at The Mineral Auction by calling (512) 698-2802 today.