Replies to This Discussion

Permalink Reply by mark edward marchiafava on July 6, 2012 at 15:36

None of the acreage maps I've seen show any county lines or even county roads.  How is a person supposed to understand where all of Goodrich's leased land is?  Goodrich's CEO was talking about how leases will skyrocket to $5,000 - $20,000 an acre, but turned right around and pretty much said it won't be Goodrich paying out those numbers. If not Goodrich, who?

Permalink Reply by Bernell McGehee on July 6, 2012 at 17:18

In Mississippi?  No one is going to pay substantially higher prices, it appears.  The fact is, you can't have higher prices without competition for leasing.  

So far in Mississippi I have seen only one case where two companies wanted a lease.  The price got bumped by $50 and the option was removed.  At this point, the second company dropped out.

Since then, the companies have more or less "staked out" territories in the name of consolidating their operations.  

The fact is that Mississippi law allows operating companies to get a drilling permit when they obtain 1/3 of the mineral rights in a unit and testify under oath that they have made a "reasonable" effort to find and negotiate with all leaseholders in the unit.  The MS Oil & Gas Board will grant a drilling permit under these circumstances.

If a landowner were to decide to ride it out to see if the TMS is a legitimate productive play in the hopes of getting a higher lease bonus or royalty and found himself in a permitted unit, the company would swear they have made a "reasonable" effort to negotiate and, under these circumstances, the mineral owner would be stuck with paying double his share of costs to drill the well.

With Mississippi's laws and with what appears to be collusion (sorry, I meant to say "consolidation of operations") by the various oil companies, there is no competition for leases.  So, again, without competition for leases, there won't be higher lease prices.

I'm sure there are other opinions, and I hope I'm proven wrong, but this is my take on the TMS situation in Mississippi.

Permalink Reply by Bernell McGehee on July 6, 2012 at 17:31

By the way, what I took from the Goodrich CEO's statement was that the leases would be worth $5,000+ per acre.  In other words, "Look at how much value we've added to our company by obtaining our leases for $250 per acre when they will soon be worth $5,000+ per acre.  You need to come buy our stock!"

I hope these oil companies are extremely successful in the TMS, and I realize the TMS is still in the iffy stage...the TMS is not a slam dunk by any stretch.  But I do wish they would realize how arrogant they sound by telling investors the leases are worth thousands of dollars while offering landowners hundreds of dollars.  It is this kind of attitude that seeds animosity between operating companies and land/mineral owners.

Permalink Reply by tc on July 7, 2012 at 1:53

What land/mineral owners need to understand is that Goodrich is saying that they will get $5,000/acre in a JV and that they value of the land is just a small part of the total value.  A JV partner especially a non E&P, is paying for Goodrich's skill in acquiring acreage, drilling, completing, gathering and marketing the oil and those skills are more valuable than the land especially to a foreign JV partner who hopes to acquire these skills to use in their own homeland. 

Permalink Reply by mark edward marchiafava on July 7, 2012 at 0:34

By looking at a recent map supposedly depicting Encana's leased acreage, it covers quite an area.  My question is are there any maps showing ALL leased land?  I find it strange if so many tens of thousands of acres have been leased, why have I not even been contacted by any of the players?

Permalink Reply by Jane Welborn on July 7, 2012 at 13:08

I have about 18 acres in Wilkinson County and contacted Encana in March, was offered 250 and 3/16.  I turned it down.  I contacted them this past week to see if there was any change in their bonus money and they said they are currently not leasing.  He told me they were waiting for the price of oil to go up.  

Jane Welborn

Permalink Reply by mark edward marchiafava on July 9, 2012 at 9:41

Over on Tuscaloosatrend.com  there's news and info only a certified geologist can decipher.  Anyone make heads or  tails out of any of that?

Permalink Reply by Dash Riprock lll on July 9, 2012 at 11:54

The Tuscaloosa Trends blog is a wonderful resource. My father was interested in geology when I was growing up in oil territory (McComb) and I got interested too. I will give you my amateur take on the info on the blog.
The southern TMS territory was a marine environment millions of years ago. The ocean creatures there had calcified skeletons, shells, etc that accumulated on the sea bed along with the decaying plant/animal material that with pressure/heat produced petroleum. The northern TMS, as in SW MS, was more like the present Mississippi River delta during that time. Lots of organic material, but mud rather than the calcium that makes the shale more brittle farther south. Obviously if you drive a spike into soft rock, the opening tends to stay open a lot more readily than if you drill or drive a spike into clay, which tends to collapse. You would rather be in a limestone cave in KY than a mud tunnel in MS. The TMS is shallower the farther north you go (and becomes thinner and thinner from 800-900 feet thick to 200 and finally non-existent), so not having to drill as deep is less expensive. Question is, can you keep those laterals and fractures open in the shale that is progressively richer in clay? That will probably tell the tale in the northern TMS at this time. Some oil is there but you need laterals and fractures that will stay open.

Permalink Reply by mark edward marchiafava on July 9, 2012 at 12:42

Let's try this approach, let's start with maps.  I'm sure you've seen all these oilfield maps.  I have never seen any map with NO county lines, NO roads, nothing to indicate just where you're looking at.  For all I know, I could be looking at a swatch of Tahiti.

Permalink Reply by Dash Riprock lll on July 9, 2012 at 13:52

For me, a good place to start map looking was the Mississippi Oil and Gas Board site. You may have already looked at these. If not, go to Amite County production map. It will give you a good Township,Range,section map of the county. The producing field outlines are not constantly updated. Locate your property on this map and then find the lease footprint maps on Tuscaloosa Trends. The lease footprints are rough approximations and you will notice leased areas of different companies overlap quite a bit. If you are interested in pinpointing what is going on near your property, I think you can go to the chancery clerk's office in Liberty and ask to see the "daybook". I understand this will list leasing transactions by location, though details such as bonus amount will not be given. I have never done this, and maybe a landman will give more info on how to go about it, but when I am back in MS I will probably check if my relatives have not.

Permalink Reply by Dash Riprock lll on July 10, 2012 at 12:14

Mr Marchiafava, this might help. Go to www.ameliaresources.com and hit Tuscaloosa Trend. This will bring up the choice of Google Maps TMS well locations. Not sure it is totally up to date but you can zoom in, roads, maybe individual cows and squirrels. Hope this helps in the map department. It is incredible that information like this is available from my easy chair. I am going to be motivated to give again to Mr Barrell's charity Emmaus House to express thanks for putting this info out there.

Permalink Reply by mark edward marchiafava on July 10, 2012 at 12:39

I saw that map some time ago, you're correct, it's outdated.  Do you know of any other sources where there's daily chatter about events?  All the sites I have found have either no or very little participation. Why is there not more interest in what's going on up there?  As remote a possibility it may be, if there's a chance of receiving any unexpected $$$, you'd think there'd be a lot more interest by others.

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