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Permalink Reply by JHH on October 13, 2014 at 13:28

What's a fair price and please list some important agreement tips.  thanks

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Permalink Reply by Edmond Ewell on October 19, 2014 at 15:20

Hey JHH. There is no fair price.In some parts of Texas they don't pay anything.In other parts that are in production they pay $50/acre. Don't expect a lot in the TMS because it is new territory. Remember that the company that does the test can only make their money back if someone buys the data.I heard the test costs about $145/ac.now .For a 300,000 ac.test that's $42 million.It is a big investment/gamble on their part.Take into consideration that they will be putting a lot of out-of-state money into the local economy. Ask them how many total hours they will be working on your property.Its usually not much.And then weigh that against the money they offer,and make your decision. Tip is to get all of your concerns for protecting your property in writing and included in the permit before you sign it. Water wells,concrete foundations, and ponds with sandy bottoms, are some things that can be damaged by strong vibrations.You can ask for a pre-test and a post-test for your water well,and include it in your permit, if they will allow it.So talk to the agent who contacts you about the risks,and ask him about safe buffer zones around sensitive areas.Ask if they are using vibe-trucks or shape charges.Don't panic if they say they will be drilling holes and using charges. Sound waves travel further through hard ground.And sound travels faster through wet ground.Find out your soil type.Remember also that you could benefit a lot financially from this test.So work with them and they will work with you.The nicer you are to the oil people the better your chances of reaping financial rewards.And don't trust me or anyone else to do your homework.Read up on seismic.

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Permalink Reply by Skip Peel - Mineral Consultant on October 19, 2014 at 16:15

Edmond, do you think the TMS shoot is speculative?  Or proprietary?

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Permalink Reply by Joe Aldridge on October 19, 2014 at 21:09

Skip,

From what I gather, its a spec. shoot.

Sounds good to me. I just hope it extends to the Southern area of the play. I've been in touch with someone that's interested in the area but the first thing they want is 3-D seismic.

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Permalink Reply by Skip Peel - Mineral Consultant on October 20, 2014 at 2:05

Joe~

That's what it sounded like to me too.  And why I asked the question to seek clarification.  I'm not sure a speculative TMS shoot currently makes much sense.  I could certainly see one or more TMS operators signing on for a proprietary shoot across some limited area.

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Permalink Reply by Joe Aldridge on October 20, 2014 at 4:16

I'm hoping that this is someone looking at the lower/deeper area to the South. I have someone interested in this area but they want to see 3-D of the area and there is none. If I can get these two groups together it might help extend the area of the play.

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Permalink Reply by Skip Peel - Mineral Consultant on October 20, 2014 at 4:24

In my experience 3D is shot after leasing is basically complete and drilling has established some expectation of commercial reserves.  I've never seen it come first.  It makes better sense to me to come after the development rights are acquired.  At $145/acre it would be a significant investment with no guarantee that the client could follow up to build the lease block.

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Permalink Reply by Joe Aldridge on October 19, 2014 at 2:22

Hey Edmund, Nice to see someone local joining GHS. Is this seismic, you refer to, local in our area or is it more to the North toward  the heart of the TMS?  I have not understood how these companies, that are active, in the TMS are leasing and doing all of this drilling with no 3-D. Interesting post. Friend me. Would love to know more about what you see happening.

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Permalink Reply by Edmond Ewell on October 19, 2014 at 15:20

Hey Joe.I am working in Texas on a 300 sq.mile seismic test.It will take about a year to complete.Word here is that there is a test coming up in the TMS that will be bigger.I think the drillers are using old seismic data that is 2D.When a company does a seismic test they add it to their "mineral library" Only a handful of companies do this because it is so expensive. Once the data is in, the drilling companies can purchase the data from the library, for the areas they have leased.Usually by the square mile.The test will take lots of planning and lots of people to complete it.

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Permalink Reply by Joe Aldridge on October 19, 2014 at 20:50

The thing that concerns me is these companies want 6 month options to lease included in the permit. The people I've heard from are quoting considerable less than $50. At $50 an acre I might do that. But anything less I would have a problem with.

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Permalink Reply by Joe Aldridge on October 20, 2014 at 4:11

Mike,

Those are the figures that I've heard plus the last company wanted an option included. So they really had a 6 month free lease. I have a problem with that at that price. The $50 with an option I would consider.

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