Replies to This Discussion

Permalink Reply by J B Nabors on January 20, 2018 at 6:39

Correction:  Amelia sold 85,000 acres of leases for $87,000,000.   M Y apologies

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Permalink Reply by Skip Peel - Mineral Consultant on January 20, 2018 at 11:43

JB, I think this reply by Joe in another, earlier thread.  The second mention (free lease) is highly likely to be referring to Amelia.

Reply by Joe Aldridge on November 7, 2017 at 9:27am

Hey Jay, You are 1000% correct. This guy wants a 5 year lease at 200 an acre paid up and an option for another 5 years. This at 20% royalty. Thanks for the heads up. We also have a group wanting a free lease for a year so they can market the area. All of this and a well right across the River at Goudau that is producing 1,000+ bbls per day. Thanks for the input.

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Permalink Reply by Dion Warr, CPL on January 21, 2018 at 8:30

JB:

This does not sound like a typical Amelia offer.  Also, it seems like Skip has conflated the terms of an offer in a prior area also worked by Amelia with another non-Amelia offer in his reply.  Can you elaborate a bit on this?

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Permalink Reply by Skip Peel - Mineral Consultant on January 21, 2018 at 9:44

Nope, no conflation here.  :-)  I think Joe made a more specific comment about the terms in the "free lease", but I can't find it.  If memory serves, the royalty was either 22 or 23%, so either a 2 or 3 % override to Kirk.  I don't recall if he mentioned the bonus per acre.  Maybe he will happen along and help us out.

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Permalink Reply by Dion Warr, CPL on January 21, 2018 at 10:28

Skip:

Joe was referring to two different parties with separate offers.  Amelia's offer was on these terms:

"We also have a group wanting a free lease for a year so they can market the area."  The area was marketed and Amelia ended up closing on the terms that JB reported above (and I believe that you posted after the press release was issued.  In other threads, Joe spoke of certain terms (1/5 RI, % of bonus retained by Amelia based upon price per lease at closing, range of bonus dependent upon preferred areas of interest).  These terms are substantially correct with any variation being negligible to the best of my knowledge.

Jay also confirmed the purchaser of these leases (ConocoPhillips).  Though the identity of the purchaser was not part of the press release, this sale and assignment is now part of the public record and can be confirmed.  Also, Jay's reference to a "ride" is reference to an override (ORI, or overriding royalty interest), which would be carved out of the lease from the WI owner's portion (or net revenue interest), not from the lessor's RI.  ORI and other retained and/or reversionary interests are commonly carved out in industry trades when assigning or farming out negotiable properties, and do not represent lease burdens that would have otherwise gone to the lessor.

The other offer referenced offer (being the first part of the sentence referenced above - for a stated fixed bonus and extended PT and option) was promulgated by another party; though there were a few different offers being circulated at the time of the Amelia PSA from various parties.  Conflating of these offers, terms and parties are sometimes unavoidable in the "fog of competition" but for the mineral owner trying to make the best decision for them and their situation, misinformation is at best confusing and at worst a disservice.

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Permalink Reply by Wayne Cook on January 22, 2018 at 2:41

Is there a link to the sale and assignment?  Thanks

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Permalink Reply by Skip Peel - Mineral Consultant on January 22, 2018 at 2:55

The document would be filed in the public records of each parish.  You can view it in person at the Clerk of Court's office or you can pay for a short term online remote access to the public records in parishes where clerks make that option available.

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Permalink Reply by Wayne Cook on January 22, 2018 at 3:12

Thank you sir

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