Replies to This Discussion

Permalink Reply by Iris on September 30, 2008 at 6:31

Might this set us or GHS for lawsuits?

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Permalink Reply by Ben Eagle on October 8, 2008 at 4:17

My understanding a company took an OPTION agreement in Natch. lately. Your crazy to do this deal for the HOPE of getting a big bonus. Hope after the 90 days is up; you will be lucky to even have a person call given the market conditions and commodity prices. The train has left the station and you missed it.

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Permalink Reply by Cottontop on October 8, 2008 at 5:15

Have you heard of anyone else getting a LETTER OF INTENT and never hearing a word after that. I heard that from someone and they should have gotten their money end of Sept (pretty good money too) and have not heard a word. It is in Natch. Parish also.

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Permalink Reply by Bobi Carr ("parker") on October 8, 2008 at 5:19

Cottontop,

I know of no particulars about Natch. per se, but it seems that everything has come to a grinding halt, even for property that is within the established 4 corners of the play.

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Permalink Reply by Cottontop on October 8, 2008 at 5:51

Thanks Parker,

Have not seen his agreement, but I thought a letter of intent pretty much a done deal, but obviously not. This was a major player too. I kept telling him they would probably come through, but......

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Permalink Reply by Bobi Carr ("parker") on October 8, 2008 at 6:07

Cottontop,

I don't know, maybe they will honor their letter of intent. It just
seems that nothing is certain right now.

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Permalink Reply by Ben Eagle on October 13, 2008 at 10:32

Hey Cottontop:
Unless their is a specific liquidated damages clause in the OPTION or Letter Agreement means they have tied your lease up and they can walk anytime within that agreed upon time frame and have absoluteiy no exposure. Zippo, Nada.
Next time take the hard cash offer and don't try to squeeze the last dollar out of the lease. Greed is a powerful emotion. The train has left the station.

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Permalink Reply by Snake Stewart on October 13, 2008 at 11:02

You know Ben, the wonderful thing about those train stations, you keep refering to, are built to accomodate the next train that arrives as well as the one that just left.

Common sense can be a very usefull emotion.Not as powerfull granted, as greed, but much more important when you live on the Haynesville Shale and want a fair lease / bonus for your acreage on the U.S.'s largest onshore N/G field.

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Permalink Reply by Ben Eagle on October 13, 2008 at 12:46

Snakey:
Hummm. Gas price probably $8 range in '09, on the cusp of any activity given drilling costs, leasing costs, etc. The big three, if CHK (doesn't get bought out) will exercise their option years thus pushing this baby 5 yrs. out. Most of the people that aren't leased are probably on the fringes anyway, I know there will be exceptions, but most. Snakester, you will get a decent price when the play develops and is drilled up but I bet the prices won't be the crazy numbers and what is PV-10% in five years. It's not the bonus, it's the royality that is the piston for the land owner. Thus, greed is a powerful emotion. Enjoy.

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Permalink Reply by Snake Stewart on October 13, 2008 at 14:34

Good points I will admit but fringe has been run into the ground and has lost its luster.If they could just admit that they arent sure where the outer edges are we could live with that.Heck , so far they havent even shown us any bad wells yet much less dry holes off the edges.

I happen to be about 10 miles from the PHK EGP # 63 that produced 16.8Mmcf per day so I dont really worry too much about the leasing numbers lowering for everyone.That only works on uninformed scared people.
The royalty is the piston if the engine is running.A higher bonus ensures that they are serious about truely drilling and working my area.Not just HBP.

If they will make $800,000 + per acre , taking a small bonus with the hopes that they will develop it in a swift manner considering their current situation borders on stupendous.You can hope in one hand...These guy's arent stupid and neither am I.

Everyone that is spreading the doom and gloom fit into 2 basic categories.You either dont understand the economics of this play or you have an ulterior motive.The last category can be split as well.You are either O&G or you have a reason to want your neighbor to not do as well as they could.

The original numbers I posted 5 1/2 months ago on the Barnett showed the acreage averaged out over a 30 year period to be worth in excess of $1,000,000 per acre @ $7 mcf.At which time they were setting records at $26,500 and 26.5%.Are those days gone forever?Sounds like they are for the faint at heart.

Here is a word problem for all the math wizards out there.

How large of a sack of potatos would have to land on snakes head to make him think that his H/S acreage would somehow mysteriously be worth less then an acre on the Barnett , when he only lives 10 miles from EGP #63 ? What time would the train have to leave the station to get snakes money to him?
Have a good one.I mean you no ill will.

Permalink Reply by Ben Eagle on October 16, 2008 at 14:50

Snakey:
Go to the group section (Natchitoches Parish) and then to the first discussion (Messenger flow rate) group and read Mr. Davis' s post. This very astute comment was spot on pursuant to the bonus prices and the future of the prices in this play. Thus, the land owners who tried to squeeze; well hopefully they will quit thinking about that new John Deere they missed and look for the real piston which is getting their land drilled. I have enjoyed the banter but given this situation via the captial markets, the stock companies which are under water per se and echoed by Mr. Davis's comments, it might be getting close to game, set, and match. Take care.

Permalink Reply by Snake Stewart on October 16, 2008 at 16:26

(QUOTE ,G. Davis) Bonus money comes once and that's it. And the bonuses being paid make this play marginally economic plus the cost to drill is too high. So much acreage in this play will go undrilled and chances are none of you will want to lease at a price that will stimulate companies to drill wells that, even if non-economic for the company, will pay you royalties. I almost bought acreage at the $000's of dollars range and luckily was spooked off. I ran the economics and applied the risk and it was not economice. I would still drill the play but at acreage costs in the $00's...

Mr. Eagle, I havent followed any of Mr. Davis prior to your sending me that direction and I am sure he is a swell fellow in his own rite. But have you actually read and understand what he is saying ? While I enjoy a good volley back and forth, this really no longer qualifies as entertainment because you assume that Mr. Davis knows more then everybody else conserning their mineral worth.For this too barely be economical for the O&G's is the most silly thing I have read on the entire history of this site and all '00's of pages. You and your buddies will have trouble leasing CV,cement/beach sands for hundreds of dollars much less anything else of value.O&G's havent done a good enough job in their sordid past to make me trust them with a "Royalty" only deal and besides, I dont owe them or anyone else for that matter,jack squat!

If it isnt economical for them at 75% then it sure as heck isnt going to be economical for me at 25% . If thats what it has to be then there really isnt a reason for me to lease at all now is there ? Its not worth my risk to have someone that may or may not break even on a well , drilling and jacking up my land.Then expect them to put the property back like it was before they got there ? No thanks! I will just sit here and keep dreaming that I heard Uncle Floyd say they would be paying in the 40's and 50's per acre in three years.Wait a minute, thats no dream! I got that interview saved on my favorites page.

Even if it doesn't get that high ,I am sorry to have to tell you but it certainly will not be in the hundreds. Good luck with that thought process on the Haynesville By Golly Shale. This countries largest onshore N/G field. Have a good one, you need some rest.(chuckle,chuckle)

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