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.
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.
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.