Any offers S of Many?

 

I received a phone call today from someone purportedly representing Suncoast, who was interested in the lease status of some property in T4N-R11W.    He was very non-committal:   just "gathering information"; "possibly future negotiations"; "we may get back to you", etc.  

He made absolutely no concrete statements or offers.  

 

Has anyone else in this area been approached in similar manner?   By Suncoast or any other entity?

 

 

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My first thought upon reading your post was Austin Chalk.  Have not been contacted recently - please keep us posted as to rumors, developments or signs of activity in 4N-11W near Hornbeck.

I was called this morning by a Landman for Justiss Oil.  He said that Justiss was now leasing in that area; made an initial lease offer:

5 years, paid up

$150 / acre bonus

1/6 royalty.

 

I will update as I can.

Some in the Hornbeck area are beginning to receive this opening offer.  It would be interesting to know what Les B, Shale Geo, Skip and Two Dogs have to say about this area insofar as product, potential and leasing activity go.
Shaye, I will defer to Jay and Two Dogs on this one.  All I know is what I read in Internet alerts that pop up on my computer.  I have all that I can do to keep up with the HA/BO Play.  Good Luck.
Shaye, Two Dogs posted the following in the Austin Chalk in Vernon Parish section:
I just hope that they drill it. I think we may get production from the TMS and AC in South Sabine.

Leased:  $300 / acre, 1/4 royalty, 3 years.   And very good lease structure.

 

Yes, i hope they drill 1,000 successful wells!!!

JB, did you lease to Justiss? Did they say anything about the formation or depth they were drilling to?

Yes. I leased to Justiss.  It was a relief to work with them after negotiating with Chesapeake.  I do recommend, if you deal with them, you modify the boilerplate lease to your criteria!!

 

Actually, I leased through their agent, SunCoast.  The folks there gave me the impression that Justiss planned to drill a lateral about the 10,500 foot horizon, Tuscaloosa Trend, I believe, looking for oil.  Personally, I would prefer a producing oil well at current prices.  

 

They either did not know exactly what Justiss is looking at, or were not at liberty to say.

 

They also wanted a clause to allow "voluntary unitization".   I told them I'd have to get back to them on that, because I don't know anything about VU.   I have posted here on HS, trying to get some information, but so far I've had nada response.

Interesting that Justiss would use Suncoast. I thought they use their inhouse landmen to buy leases. I have never heard anything bad about Justiss other than low ball offers and you can't blame them for trying to get the best deal done, cost wise. I wouldn't think they would use voluntary units on a TMS or AC play but who knows what will happen with the TMS since there are so few wells drilled so far. They may want the voluntary language as an option in case there are some in the area that may want to ride the well down (UMI). There is no forced pooling in a voluntary unit, they just cut you out.  With the high number of dry holes drilled in your area, it's good news that someone is interested in trying something different. This one will be interesting to watch.

I found the following:

James:

In LA, voluntary units are formed by the pooling of leases around a well, without the formation of a drilling unit by the LOC. The pooling of leases is generally permitted under the terms of the lease without Lessor's joinder, but lessor may alternately negotiate a provision that leases may not be pooled without the lessor's consent. If this is the case, lessee must get permission from lessor to pool his lease with other leases, as the contract is the law between the parties. Voluntary units are declared by instrument, are filed in the courthouse records, and a copy is filed with the LOC along with appropriate permit paperwork.

When the LOC forms a drilling unit, it orders the force-pooling of leases within the drilling unit. It also recognizes one of the lease owners as operator (generally, the party with the most leasehold in the unit). Since LOC forms a drilling unit as the state regulatory body in compliance with the public policy of the state, Lessee did not pool the leases, LOC did it by force of a field order, and lessee did not breach the lease.

Discovery wells at a new formation in a field (or in a new field) can be operated as voluntary units until such time as a petition is made to LOC to form drilling unit(s). Thus, a well can start life as a 'lease well' (e.g., Smith 20 #1), operator forms a voluntary pooled unit around the well (e.g., VUA; Smith 20 #1), petition the LOC to have a unit formed around the well and/or form other units (e.g., Field Order 9999-C creates HA RA SUA through H, force pools the lands, minerals, and leases within each of the units, and recognizes the Smith 20 #1 as the unit well for the HA RA SUA, and the well then becomes 'HA RA SUA, Smith 20 #1').

Thanks, Tom.  

 

That is right on.

 

Do you know anything about the pros and cons?   What are the dangers and advantages?

 

 

That is a question for the experts, but there are certainly no "dangers" for those choosing to remain unleased unless that be to receive no up front signing bonus.

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