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landownerPermalink Reply by Lisa Melder-Johnson on September 15, 2018 at 6:06

Makes sense then.   Economically.   R & R (Magnum) also has a bunch more BLM units leased that they just extended which was around $110 an acre.   $4000 seems a little high as to what landowners are actually getting.   But such a large area too. Could have been a bidding war if a good potential area.  I do know that this area is the unit/area as to where Chesapeake & Oxy drilled several wells in mid 90's,   This is the largest BLM unit in the area.   The rest are 900-2000 acres only.   Their intent could be to resale for a profit.  Will have to see where they show up next.  Also MBI has a lot of the BLM acres leased up in this area.  I am in a BLM unit MBI has, which is just to west of one where Gordon well was.  Magnum probably got a lot of useful info from this well too, which will never know.  Thanks Skip for all your help.   I am just wishful of this area producing.

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on September 15, 2018 at 6:19

You're welcome, Lisa.  The value of $4000/acre is unrelated to what mineral lessors receive for lease bonuses.  And $4K is conservative based on no easily recognizable short term development interest.  In the Permian Basin, companies have purchased leasehold for $45,000/acre, or more.  The recent lease sale in New Mexico brought a successful bid of over $90,000/acre.  I doubt that Magnum incurred the expense to generate any "useful info".  This doesn't appear to be an "exploration" well.  It appears to be a well to meet a "drilling commitment" in a lease.  Nothing more, nothing less.

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landownerPermalink Reply by Lisa Melder-Johnson on September 15, 2018 at 12:49

Good deal Skip!  So expensive to drill and acquire land for companies.  Price of oil up helps, but still a risk that must be lessened over time.  New technology helping too.  Just glad I am in a good area of AC/TMS.  In time all hopefully will be profitable.  I'm still learning on all this and guys like you have helped me alot.

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landownerPermalink Reply by Lisa Melder-Johnson on September 14, 2018 at 8:01

Rig signs are gone too!

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