Replies to This Discussion

Permalink Reply by ken hatcher on September 16, 2009 at 11:35

I have assumed (maybe incorrectly) that since swepi unitized these section's they had over half or the majority of land in each one. Am i right or is this not true. Cheasapeake is working hard and shell/encana don't appear to be interested right now on unleased acreage.

Permalink Reply by Skip Peel - Mineral Consultant on September 16, 2009 at 11:56

Dixie. In order to determine the field(s) covering the sections in your and adjacent townships, see the discussion, " How To Track Development Activity ...." on the new SONRIS Help Center Group page. ken. It is counter intuitive but true that the LA. Office of Conservation does not require a minimum percentage of acres in a unit be under lease to one company in order to make an application for unit status.

Permalink Reply by Doug on September 21, 2009 at 9:00

They do not require a minimum percentage? Do you mean that they don't have to have a minimum in order to apply? For example, in one section, Company A has 1 acre and Company B has 639 Acres, but Company A can still apply for the permit? Or do you mean that Company A doesn't have to have any % of the section under lease in order to apply? That would seem to say that a company could apply for a unit without having ANY minerals under lease. I thought they had to have at least 80% under lease in order to apply for a unit. Thank you for your input.

Permalink Reply by Skip Peel - Mineral Consultant on September 21, 2009 at 9:14

Doug. On a lease well basis, the operator must have a minimum 80% of the minerals under lease. On a unit well basis, there is no minimum. Please keep in mind that a minority of wells have only one owner. The majority have multiple working interest owners and an operator. The major players form units in order to be the operator. Others, Samson Contour comes to mind, obtain unit orders to aid development and to allow them to designate an operator. For an example, you may find a Petrohawk well in a Samson unit. I doubt that a company with an inferior lease position in a section would apply for a unit order without the company with the superior position objecting to the application. Business economics as opposed to state regulations drive unitization.

Permalink Reply by Skip Peel - Mineral Consultant on September 21, 2009 at 9:50

Doug. I too thought that there must be some regulation mandating minimum acres under lease to qualify for a unit order. When I could not find one anywhere in the regs, I sent an email to the attorney for the Louisiana Office of Conservation. He confirmed that there was no such requirement.

Permalink Reply by LB on September 19, 2009 at 4:01

Dixie, section 12 is in the Grogan Field.

Permalink Reply by Dixie on September 16, 2009 at 12:52

Thanks Skip, I will check it out.

Permalink Reply by ken hatcher on September 22, 2009 at 5:11

Skip, are you of the opinion that the unleased within 10 mile radius of converse positon's will improve in the near future? First of year...??

Permalink Reply by Skip Peel - Mineral Consultant on September 22, 2009 at 5:27

In general, yes. Much will depend on the first round of well completions in the immediate area. Good wells = more development and increased value of minerals. Not so good wells = well, you know, the opposite. Some completion results will likely be announced in fourth quarter/end of year reports that should be released in late February or early March of 2010. Until then all we can do is track development activity and keep our fingers crossed.

Permalink Reply by Martin on September 24, 2009 at 4:32

Skip --
Had a phone call from my acquaintance with property in section 30, 9N, 12W. He and his neighbors have continued to get low ball lease offers until late last week. Chesapeake has now started approaching property owners in his area -- $5000.00/AC bonus and 25% royalty. i don't know specific sections, but the offers seem to be bounded by Midway road, it's extension past the Sardus cemetery, and along highway 483 to Oak Grove. At least one owner declined the offer after consulting an O&G lawyer who advised him that if he could wait until the first or second quarter of next year that he might receive a bonus payment approaching $12,000.00/ac. Also survey crews have been seen working section 18.

Permalink Reply by Skip Peel - Mineral Consultant on September 24, 2009 at 4:42

Martin. Those are all good indications of possible future development. As to offers of $12K/Ac in the first half of 2010, that seems to be a stretch. There is currently insufficient evidence to support that assumption. When I hear projections like that it makes me wonder if the attorney in question is actually an experienced O&G attorney. Sounds more like a fortune teller gazing into a crystal ball. Or a non-O&G attorney with a percentage compensation deal practicing a little wishful thinking.

Permalink Reply by ken hatcher on September 24, 2009 at 15:02

I concur skip but with the right set of circumstances we might be able to ease past the 5-k plateau. However the 12-k sound's good to me. I would not mind being wrong. Martin some one got $5200.00 p/a in our neck of the wood's. I will attemt to confirm. Was the offers your talking about from merit. They told me they were handling t-9,r-12w and that porter was working t-9,r-13w. It appears comstock is going to try to lease t-8 & t-9 and that is good new's.

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