I have had very good results by taking working interest in wells and not leasing my land. In my case land was leasing for about $250 per acre so I gave up the bonus.
Then Fina paid all drilling costs and held back payment until they recovered 100% of drilling costs. Then they paid me and withheld my share of operating costs. Of course had it been a dry hole I would have got nothing but with no expense to me. This was the risk I wanted to accept as I had confidence in location.
I am a geologist, grew up in the area, and watched the early development of North Shongaloo Red Rock field from early 50's to date, even though I left area in late 50's. I closely follow oil developments via personal contacts and Sonris, and visiting area about every two months. Additionally I operate 2 wells down there.
All this does give me some advantage, but anyone can do same as I did (not lease) if they want to take the gamble, and it is always some gamble.
Now, if I were offered the same kind of leases as some, say 25,000 per acre I would probably lease
. At age 75 I think I might help my daughters spend some of their inheritance.
If one does as I did you need to deal with first class companies.So far I have done deals with XTO, Fina, EnSight, Will-Drill and EnerQuest with good results.
All wells were within, but on edge of a productive area.
I felt that the risk was low on each well.
This is not a recommendation to anyone to do as I did.
Results will vary based upon site locations, partners, etc.
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As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More