Replies to This Discussion

Permalink Reply by king john on October 28, 2009 at 23:09

hey hotdoc, i have heard of 5000 and 25% but thats the most i have personally heard of. what part of the county are you in? i have a bunch of relatives in the area, but have not spoken to anybody in a while. the next time i do , i will inquire. they usually have a good idea of whats going on county wide.
jurassic and oilvoice both throw out headline type articles and generally are not a good source of information. if you live in the area. i suggest you spend some time at the county clerks office and look at recently recorded leases to get a feeling of what current bonuses are. i firmly believe within a year or two, the bonus rate should go up.
kj

Permalink Reply by Hotdoc on October 29, 2009 at 1:01

I am in the Stockman Field in a proven area. We were also on the drill schedule this spring but as you know they stopped drilling and then my lease lapsed in July. They have re-leased around me in the unit to the poor souls that took 500 and 20, but their offer was insulting to me since it was less than what I had before so I told them that I wasn't interested. Some of my acreage is already tied up in a unit but still have fairly large acreage. I know that early this spring the adjacent property went for 5000 in spite of the slowdown.

Permalink Reply by Adam on October 29, 2009 at 1:43

As a landman in Shelby County, I can tell you that we are not paying anything near those prices. Cant speak for the rest of the industry, but I know we arent.

Permalink Reply by king john on October 29, 2009 at 2:04

i dont know who you work for adam, but my crystal ball says you will...lol... maybe in as soon as 2 years ? who knows. stick to your guns hotdoc. i think its about to get hot and heavy in the stockman field. i have first hand indications that it is.
kj

Permalink Reply by Garry on October 29, 2009 at 9:19

yea!

Permalink Reply by Lorissa Gail on October 29, 2009 at 10:01

Adam, as a landman in Shelby County, what are realistic expectations of royalty and bonus offers?

Permalink Reply by Hotdoc on October 29, 2009 at 10:53

I know it is getting hot and heavy in the Stockman Field. It is just waiting to see who is going to pay the most, I already have a "depending on Seismic" offer of 5000 but can't count my chickens before they hatch so to speak. My 3-D seismic is supposed to be delivered to some of the O/G companies this week so we shall see. Of course land men are not going to say what is being paid because they want it cheap as that is the name of the game. No offense to any land men out there but with ones I have dealt with in the past that is the case.

Permalink Reply by Adam on October 29, 2009 at 11:37

I have no problem letting people know what the going rate is.

For my company, depending on your area, we are averaging at about $500/ac & 20%. I have paid higher bonuses but they also come with lower royalties. I have also paid a few areas a bit more with similar royalties for tracts that I really liked. County wide, my average is about $500/ac since 1/1/09. Now if you include the high prices we were paying last year, the average goes up to around $1,000/ac. We have obviously taken way more leases at lower prices than higher.

I have said this before and will say it again (even thought king john will yell at me for it), Bonuses are to be based solely on desire and competition. A company is going to pay what the competition brings up to its point of desire. Beyond that, they will step back and let someone else have it. Desire and competition are low right now, therefore prices are low. Should the deciding factors rise again, then prices may as well.

Permalink Reply by ken hatcher on October 29, 2009 at 11:40

"POOR ADAM"

Permalink Reply by GoRicky on October 29, 2009 at 12:08

Cabot has reported very good results drilling the Pettit horizontally. Also, a JV well with Common is reported as producing 21 Million @ 7,800# FCP & still "cleaning up" after stimulation. Does anybody know which well this is? Cabot just says "East Texas", but Common is the operator & all I've seen Common permit are Shelby & San Augustine wells.
Also: does anyone know about the Devon - Kardell well just on the edge of San Augustine?
•Laisser les bons temps rouler- "Let the good times roll"!

Permalink Reply by jffree1 on October 29, 2009 at 12:50

GoRicky, Lot's of speculation about which is the new Cabot well. It was guessed by one industry member that it was the Red River 619 which Common reported @ 16.7 MMCFD. I guessed Red River-Smith 98 because of the permitted lateral length and ALongview guessed Red River 257 #1. So, there you go, take your pick, LOL. It should be in the Drilling Report shortly if it's not the RR 619 which already reported.
Southwestern stated today that the Burrows #1 is testing now so we should hear about that one soon also.

Permalink Reply by DJG on October 29, 2009 at 13:42

Southwestern has their Investors Conference Call tomorrow am, so it will be interesting to see if their is any new info released at that time.