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Permalink Reply by Jesse Joyner on November 19, 2018 at 5:53

Sorry to see them go. Questar/QEP's Salt Lake City culture, which was also included in its land department out of Denver, will be missed. My family will always be indebted to a senior landman who stepped up and gave us a remarkable, once-in-a-life lease with a free-royalty clause (that actually held up, unlike Chesapeake's), some very serious bonus money, and 1/4 royalty. They were good guys who stood by their word. More honest than most. The oil patch truly needs more like 'em. Louisiana's lost and Permian's gain.

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Permalink Reply by Skip Peel - Mineral Consultant on November 19, 2018 at 6:14

QEP, like most operators, has pluses and minuses.  The major take away here IMO is that QEP lost interest in their Haynesville assets in 2011 and has done nothing but re-fracs until early this year when they drilled their first latest version Haynesville Shale well.  It was a very good well in Bienville Parish that boosted the industry's opinion of an area that had lesser perceived rock quality.  Since Aethon has operations in this corner of the play, it makes sense that they would care to acquire the QEP rights, wells and infrastructure.  Aethon has a reasonably aggressive drilling program that should benefit mineral lessors in the QEP units and may even be a reason for Aethon to attempt some step-out wells that would increase the area proven to be economic and benefit un-leased or under-developed mineral rights.

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Permalink Reply by Jesse Joyner on November 19, 2018 at 6:33

True, Skip. They pulled back on the reins and didn't chase the rock like other operators after QEP's initial gamble on leases, which were inked at much higher NG prices. So they got caught in a cash squeeze when reality set in. Yet in one way, landowners benefited from the higher-lease prices and from no drilling, in hindsight, now that NG prices are much higher and there are wells permitted to be drilled in at least one of their old locations, which means with the new completion technology and the higher NG prices, the landowners are going to make MUCH MORE MONEY than they would've if they'd been drilled years ago. Plus, some folks might not realize it, but when the bonus money gets so very high, that windfall can really make a huge difference for many years compared to a one-well/one section old style frack. If I took the time to actually add up the numbers, I'm guessing that the big bonus money might almost outweigh the money from production on one of QEP's old style wells. So I personally have no complaints. It was nice to deal with a landman who did what he said he'd do and coughed up the beaucoup bucks. Great guy. I'd sign with him again if I ever had the opportunity.  

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