Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on July 31, 2009 at 10:18

Does anyone know any background on Ellora?

Permalink Reply by Lee on August 1, 2009 at 9:05

SONRIS has EOG as the operator of this well now. Is this new or was EOG always listed? Thanks.

Permalink Reply by Skip Peel - Mineral Consultant on August 1, 2009 at 9:09

Slimey. Ellora is listed as the original operator. Now EOG. I'd say that's good news for mineral owners in the Ellora HA Units.

Permalink Reply by Mattie on August 10, 2009 at 10:25

Skipper,

Ellora is a Colorado-based company who showed up and bought a block of acreage in the Spider & Benson areas of DeSoto Parish (primarily) in search of James Lime (based on EOG and St. Mary Land's successes of the past 2-3 years. I don't think they had a clue about the Haynesville Shale until it started showing up via CHK and others' promotions.

I think Ellora hung tight with their acreage position based on the successes across the Texas state line with the Bossier trend (Leor Operating, Burlington). Given EOG's acreage position in these same areas, it would seem to be a logical fit for EOG to take over - much better capitalized for sure.

Permalink Reply by Skip Peel - Mineral Consultant on August 10, 2009 at 10:43

I think you are exactly right Mattie. And I hope EOG makes some great wells out of that Ellora leasehold. That would certainly help the value of minerals on the southwest edge of the Play. And in E. TX.

Permalink Reply by Les Bamburg on August 1, 2009 at 9:14

Slimey, thanks for catching that. Sorry for the oversight and I will revise now.

By the way, EOG is known as the best technical driller in the Barnett Shale as they were about the only operator that consistently made economic wells ouside the primary area.

Permalink Reply by RC on August 17, 2009 at 4:16

Hello Skip,
A friend has some in-laws with 40 and 11 acre tracts in section 30 of this same T9N - R 14W. He currently has an offer of $1,000 / acre - 25% royalty from EOG. I have suggested that he contact an atty but, on first take is this a fair offer? Any other thoughts about the area?

Thanks,
RC

Permalink Reply by Skip Peel - Mineral Consultant on August 17, 2009 at 4:37

This is an "opening" offer. EOG does not have a HA unit application nor a well permit in Section 30. Make a township grid to plot the HA drilling units and wells and make a commitment to wait. Be cordial but do not jump into lease negotiations just yet. Don't concentrate on bonus amounts. Decide what lease terms you would like to include in an O&G lease. Start negotiations by presenting your desired lease terms to the landman. After the lease language is agreed to, you can consider a bonus offer based on the information available at that time. Not now. 51 acres represents a potentially significant up front cash payment. Depending on the pace of development activity (it is quite small and slow in this area at present), I would think the 2010 bonus range for tracts in these size ranges to be in the $3,500 to $5,000 range with natural gas prices north of $5. For these size tracts, I would suggest that you do your own negotiation and engage the services of an experienced O&G attorney for a one last look review prior to executing the lease.

Permalink Reply by RC on August 17, 2009 at 4:54

Outstanding insight! I will pass it on.
Many thanks, RC

Permalink Reply by Mike on August 17, 2009 at 8:35

Hey Skip, Do you think there will eventually be any interest in S14 T8N R13W just south of Noble? If so what bonus range would be appropriate for 2010? It is 150 acres.Thank you.

Permalink Reply by Skip Peel - Mineral Consultant on August 17, 2009 at 8:51

Mike. SWEPI has two HA drilling units in Sections 1 & 2. There are no other units or operators. There are zero HA wells in 8N-13W. There is just not enough activity in the township to make any projections.