Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on January 6, 2010 at 8:30

Joanne. This is a common occurrence. I don't have any specific knowledge of the impact on lessors of Burk Royalty's assignment but I can guess that it indicates an interest by Chesapeake to develop the leasehold. This is a good opportunity to remind members that their leases are binding on any company that may acquire the associated rights. I suspect that Burk Royalty is a land company that assembled this acreage either under contract to CHK or as a speculative investment for themselves. Two things to look for: 1) Do these leases have royalty terms less than 25%. If so Burk will take the differential as a portion of their profit. 2) Is Burk listed with the TX. RRC as an operator. Do they drill wells? If not, they are likely a land company.

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Permalink Reply by jffree1 on January 6, 2010 at 8:41

Registered Operator

108799 BURK ROYALTY CO., LTD. P O BOX 94903 WICHITA FALLS TX 76308

They have only vertical and directional completions in Dist. 6.

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Permalink Reply by Skip Peel - Mineral Consultant on January 6, 2010 at 8:45

Thanks, jffree1. Burk probably assembled this lease block for a shallower prospect intending it for their own development and assigned it to Chesapeake when it became a shale prospect.

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Permalink Reply by DJG on January 6, 2010 at 8:47

Shallow well opperator that has been working the area since around 2002. Have had some verticals in Shelby Co, but don't seem to have the capitol or science for horizontal completions.

I imagine that they have much of their leases HBP due to production on the shallow depths and are now partnering up with CHK to do the actual vertical completions.

I also recall that they went to court against CHK earlier as they had a confirmed deal in 2008, which CHK did not honor. I imagine that most/many of these same leases were part of that suit and subsequent settlement.


http://dockets.justia.com/docket/court-txedce/case_no-2:2008cv00410...



Operator Name: BURK ROYALTY CO., LTD., Operator No: 108799
County Statewide Onshore
Lease, Jan 1993 - Jan 2010

View Page By Page

Lease name Lease No. District No. Well No. Oil (BBL) Casinghead (MCF) GW Gas (MCF) Condensate (BBL)
BEARD GAS UNIT #1 140316 06 2 0 0 248,559 4,130
BEARD GAS UNIT #1 165341 06 3 0 0 2,593 78
BEARD GAS UNIT 1 112210 06 2 0 0 0 0
CAMPBELL 253311 06 1 0 0 0 0
CHILDS 229281 06 4 0 0 76,576 527
CHILDS G.U. 140900 06 1 0 0 462 120
CHILDS GAS UNIT 116257 06 2 0 0 220,813 649
COVINGTON 245189 06 1 0 0 0 0
DANCE 249563 06 1 0 0 3,660 1
EPPS 246816 06 1 0 0 8,010 8
GRAVES 141697 06 2 0 0 170,384 2,993
GRAVES, J. R. G.U. 098598 06 1 0 0 48,443 2,906
GRIFFITH 247699 06 1 0 0 90 0
HUGHES 251871 06 1 0 0 9,881 0
SAMPLE 14813 06 0 0 0 0
SAMPLE 245614 06 1 0 0 13,019 20
SMITH 247702 06 1 0 0 0 0
STOCKMAN GAS UNIT 1 202225 06 4 0 0 300,918 3,854
STOCKMAN GAS UNIT 1 205992 06 5 0 0 257,119 5,455
STOCKMAN GAS UNIT NO. 1 180863 06 3 0 0 126,229 3,542
STOCKMAN, EMMIT 151158 06 1 0 0 92,199 2,687
STOCKMAN, EMMIT 165359 06 2 0 0 201,708 3,262
WHEELER UNIT 087043 06 1 0 0 61,372 1,199
Total 0 0 1,842,035 31,431

View Page By Page




-------------------

Operator Name: BURK ROYALTY CO., LTD., Operator No: 108799
County Statewide Onshore
Annual Totals, Jan 1993 - Jan 2010

Date Oil (BBL) Casinghead (MCF) GW Gas (MCF) Condensate (BBL)
2002 0 0 246,736 4,939
2003 0 0 224,615 4,534
2004 0 0 291,020 5,679
2005 0 0 307,954 4,671
2006 0 0 196,386 2,861
2007 0 0 202,344 3,585
2008 0 0 206,832 2,960
2009 0 0 166,148 2,202
2010 0 0 0 0
Total 0 0 1,842,035 31,431

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Permalink Reply by Skip Peel - Mineral Consultant on January 6, 2010 at 8:51

You guys are good!

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Permalink Reply by DJG on January 6, 2010 at 8:52

I do find it VERY interesting and feel that it bodes quite well for Shelby County and E.Texas prospects in general that CHK is moving towards developing these leasehold while, at the same time, they are currently looking off-loading 100,000+ acres in different areas of the play and just sold out a 25% stake in their Barnett position.

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Permalink Reply by Skip Peel - Mineral Consultant on January 6, 2010 at 9:00

Chesapeake was the first company to make a total commitment to shale gas. Many dabbled in it early on or found themselves in the middle of it with legacy leasehold from other prospects mainly Hosston/Travis Peak or Cotton Valley in this part of the world. However no company that I am aware of has so fully focused on shale gas and been as aggressive in acquiring leasehold in the majority of the major shale plays. Wherever I see development activity by CHK my first thought is shale.

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Permalink Reply by Les Bamburg on February 28, 2010 at 5:25

JR, you are absolutely correct. Mitchell experimented for years in the Ft Worth Basin to finally "crack the code" on drilling economic shale gas wells. If not for them, we would not have all these great shale gas plays today.

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Permalink Reply by Skip Peel - Mineral Consultant on February 28, 2010 at 5:40

We have discussed Mitchell Energy as the innovator of the techniques now employed by the industry on more than one occasion on GHS. And given Devon the credit for being foresighted to acquire the company that George built. However my statement was not about who did what first. It was that Chesapeake was the first mid-major company to go all in on shale gas as a corporate strategy. Devon still trails CHK in total horizontal completions and leasehold positions prospective for shale gas. And until recently, many of their areas of operation and much of their lease inventory were off shore and over seas. Not shale plays. Since Devon announced their intent to sell off those off shore and over seas assets and concentrate on domestic operations, it appears that they are signaling an intention to make shale gas their focus for the future.

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Permalink Reply by ledlights on February 28, 2010 at 17:52

Actually - compared to a lot of discussion boards GHS is refreshingly low in ego polishing, in my opinion. 99% of my time on the board is an exercise in ignorance reduction and there are clearly folks worth listening to around here.

You may have chosen your pseudonym well, JR.

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Permalink Reply by ledlights on February 28, 2010 at 18:58

That is - reduction of my own ignorance. I don't get the sense that people are pretending to be e&p experts - they're just gleaning information wherever they can - and sometimes it is worthwhile stuff.

Permalink Reply by ledlights on February 27, 2010 at 20:12

Makes sense to me. And I had heard that Chesapeake has been making some lease offers in East Nac. county in an area within their map of the Bossier Shale core zone, though not within their map (as of last conf. call) of the HS core zone. But I haven't seen any confirmations on GHS so far. If the Barton well is good maybe activity will accelerate in that area.

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