All Discussions Tagged 'evalaution' - GoHaynesvilleShale.com2024-03-29T04:44:03Zhttps://gohaynesvilleshale.com/forum/topic/listForTag?tag=evalaution&feed=yes&xn_auth=noExpected Increase in Offers to Purchase Minerals - Know your Property!!!tag:gohaynesvilleshale.com,2020-03-17:2117179:Topic:38946172020-03-17T20:46:16.780ZRock Manhttps://gohaynesvilleshale.com/profile/MarkP
<p>The combination of reduced new drilling plus lower O&G prices will be leading to a continued decline in monthly royalty payments. In unconventional O&G plays (I.e. Shale Plays like the Eagle Ford, Haynesville, Bakken, Permian Basin, Niobrara, etc.), we all know that production decline is rapid after a well is put to sales and that production will settle in at rates that are only 80 to 90% (or less) of the initial rates.</p>
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<li>The plus side of this "80-90%" volume is that it…</li>
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<p>The combination of reduced new drilling plus lower O&G prices will be leading to a continued decline in monthly royalty payments. In unconventional O&G plays (I.e. Shale Plays like the Eagle Ford, Haynesville, Bakken, Permian Basin, Niobrara, etc.), we all know that production decline is rapid after a well is put to sales and that production will settle in at rates that are only 80 to 90% (or less) of the initial rates.</p>
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<li>The plus side of this "80-90%" volume is that it should last for years (10,20 or more) assuming no mechanical problems. Nice consistent mail box money.</li>
<li>The negative is that this isn't a lot of money coming in on a monthly basis.</li>
</ul>
<p>Operators have no reason to drill up their undrilled locations in a unit if there is a single well holding the unit by existing production (HBP). And there is no reason for them to drill new wells and tap new O&G reserves unless there are some good financial reasons to do so.</p>
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<li>And prices will be a major factor in this decision.</li>
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<p>Companies that purchase minerals will use this time as an opportunity increase their efforts in bombarding mineral owners with offers for their minerals.</p>
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<li>And some mineral owners will have some tough decisions to make as to "sell, keep or sell some / keep some."</li>
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<p>I would encourage all mineral owners to "know their position" so that they can make informed decisions as to their and their family's O&G assets.</p>
<p>Following are the three major issues I would want to know as a mineral owner (which I am):</p>
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<li>How may productive intervals or target zones / benches are in the unit?</li>
<li>How many vertical or lateral wells can be drilled in the unit per bench / target interval?</li>
<li>Approximately how much recoverable O&G is left to produce in the unit?</li>
</ul>
<p>Either through individual research or via use of a consultant, it is time and money well spent to understand your potential assets.</p>
<p>As always, this is just my opinion on this situation.</p>