Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 3:32

You're welcome, scout.  Please be aware that many land companies use words like "Energy" or "Exploration" in their names.  There's nothing illegal or, I'm sure they would argue - unethical, about that but it does give many laymen the idea that they drill wells.  This is useful as it often keeps mineral owners from asking specific questions regarding which company will be drilling under their lease. 

To distinguish a "land company" from an "operating company", it is often useful to check to see if the company is registered with the state as an operator.  Companies that perform land work are not.  Companies that actually drill wells are.  Use this link, enter the key word, Hunter, and then click on each company to see if they actually have any producing wells or live permits to drill.

http://sonlite.dnr.state.la.us/sundown/cart_prod/cart_con_wellorg4

Permalink Reply by John Lann on March 21, 2018 at 3:16

Scout,  Yes,  I had stated that information in one of my post.  The other that was offering was Acadian Services.  As the two offers kept climbing, Acadian withdrew their offer.  We do not know Hunter from Adam, but someone like EOG was not making an offer.  We hope Hunter knows or learns how to do what EOG does when drilling.  Like others have stated about not being first in an area, hoping Hunter will do a little wait and see, but I have a feeling they will not.  Who knows, they may sell all of their lease's  to another, if that is even possible.   Still a novice typing this.

John Lann   EBR Parish

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 3:17

Hunter Exploration does not drill wells.  That is because they are a "land company".  They take leases for clients, as does Acadian.

Permalink Reply by John Lann on March 21, 2018 at 3:31

Skip,  we did hire an attorney with think with "savvy" to do the final step after we thought we should go ahead and accept the offer.  I am not using his name but was impressed with his knowledge and his time in this business.  He did not accept the Hunter contract without adding and deleting portions.

John   EBR

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 3:43

Did your attorney tell you that Hunter was a "land" company, not an "operating" company.  If not, he/she may actually not be that savvy.  Adding and especially "deleting' language does not an O&G attorney make.  In fact I have never in my career seen an experienced O&G attorney delete any language.  If they don't like or fully agree with some boiler plate language in the lessee's lease form, they place language effectively replacing it in an Exhibit to the lease.

Permalink Reply by John Lann on March 21, 2018 at 4:13

Skip,  I think I have been too casual in using deleting and adding.  I do know that he made adjustments in the exhibit ,and even saying it like that may still be too simplified compared to what an attorney would say.

John   EBR

Permalink Reply by Rock Man on March 20, 2018 at 16:03

The AC Hz Frac play that EOG and others have been playing in C Tx and that EOG is trying to push into Louisiana is very different from the "old" AC play where natural fractures were the key to production.

Although the presence of O&G (and water) charged natural fractures are a plus in the AC Hz Frac play, the key here is to treat the AC like the Eagle Ford or any other unconventional reservoir, i.e. drilled and case a horizontal wellbore in the a target zone, cement the casing into place and then stage frac the cemented laterals with proppant and fluids to create a stimulated rock volume that interconnects the porosity in the AC and liberate the O&G trapped in that pore space.

Due to low perm, heavy mud weights are not a detriment to these types of reservoirs since it is next to impossible to invade into the low perm AC.

Permalink Reply by Bob Zimmerman on March 20, 2018 at 16:43

Very informative, Rock Man. As they say, you rock.

Permalink Reply by Skip Peel - Mineral Consultant on March 20, 2018 at 23:59

Thanks for the explanation, Rock Man.  I get it.  It makes sense that the low permeability renders mud weight irrelevant. 

Permalink Reply by Joe Aldridge on March 21, 2018 at 1:03

Well Skip I think we have a problem. If their drilling protocol is so great then why isn't the well making 5,000  to 10,000 bbls a day. If their drilling protocol is correct then why is the well uneconomical. Why is EOG cancelling the 3-D seismic. Why is EOG not moving on the 3-4 wells that we were told they were planning to drill back in January.. No wells have been staked, permitted, or are drilling.  Anadarko and Pryme killed the play 3-4 years ago. Now EOG is killing round 2.

Permalink Reply by Skip Peel - Mineral Consultant on March 21, 2018 at 1:13

Sorry to hear that you have a problem, Joe.  I hope you'll get over it.  Rock Man's explanation lines up with what I have heard from other sources I trust.  One early well does not make or break a potential play.  Do you know for a fact that EOG has "cancelled" the seismic?  Or is it possible that they have simply postponed it?  As you know, drilling plans often change and unless a company makes a public statement, we are left to speculate.  Being "land focused" in my business, I take some confidence from the fact that EOG, and others, are continuing to lease prospective AC acreage.

Permalink Reply by scout6486 on March 21, 2018 at 3:30

Skip,

I understand that EOG continuing to lease may translate to a show of their confidence in the play. Do you know if they're just leasing up the hold outs (i.e. large mineral owners with more negotiating leverage)? Sealing up deals with hold outs vs. pursuing new acreage are two separate strategies.

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