Replies to This Discussion

Permalink Reply by The_Baron on December 18, 2008 at 4:44

Jim and I were discussing leases that were taken with no statement of an effective date, they were just standard leases. They were recorded despite the fact that other leases were still in effect.

The second situation is a traditional top lease, with an effective date other than the date on the lease.

Permalink Reply by The_Baron on December 11, 2008 at 18:43

Say the lease is effective from the date of signing.....Say the previouse lease is stillin effect..say the well holding the lease is marginal at best and is P&A a year later....the original lease is now expired...the other new "toplease" is now in effect..Yes I know Jim, not the traditional toplease, but it is happening on Tauens/Fossils/Cubics leaseholds as we speak.

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Permalink Reply by Spring Branch,mineral owner on December 12, 2008 at 4:14

Hence the reason I said I thought it was very risky business to buy a lease on a tract that is being held by production, betting on some unknown future event to make the lease valid.

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Permalink Reply by The_Baron on December 12, 2008 at 4:17

I agree with you jim, but they are leaseing tracts currently hbp.

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Permalink Reply by The_Baron on December 12, 2008 at 5:12

I still agree with you jim. But I have seen tracts leased by tauren, that have producing wells, and have new leases recently filed by HK and CHK. I am not making an argument for the validity of these leases. There could be legal actions occuring that is not public info yet, but I do not know anything to that fact.

I am simply stating what I have seen in the records.

Permalink Reply by Two Dogs, Pirate on December 12, 2008 at 5:06

I did the same thing one time. It was kind of a leveraged buy out and yes it was risky. The operator was a novice that bought a small oil field from the bankrupcy court. He reaped all he could without spending much money on the upkeep of the wells. All the wells had stopped producing but one. A gambler client, a novice also, was watching the last well through a hand that was taking care of the well. The hand notified the gambler when the last one stopped producing. The operator put the oil field up for auction with some other stuff. The gambler got us to buy leases on the last unit banking that the operator would not spend any money on the last well to get it back in production in the 90 day time frame the operator had before loosing the leases. The unit was 80 acres with just a few mineral owners. His offer was $150 and 1/5 for 3 year term. Pretty good deal for that period in time. I bought the leases. 3 days before the auction the gambler notified the operator that he had top leased the unit. The gambler met with the operator and bought the field for $350,000. Someone bid $750,000 for the field at the auction but it was already sold. The gambler brought in a workover rig and got the last well back online before the old leases ran out and never recorded the top leases. The original leases were for 1/8 to 1/6 royalty. So the gamble paid off. I took leases on the remaining mineral owners that leases had expired and the gambler started drilling new wells. The gambler used the old time method of exploration call creekology. His first new well came in at 100 barrels of oil per day and half million of NG. Second well came in at 130 BOD and 1.2 million NG. The third well came in at 150 BOD and 1.4 million NG. These were all Wilcox wells on small units. The mineral owners had some good mailbox money and were all glad that the gambler did what he did.

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Permalink Reply by The_Baron on December 13, 2008 at 15:37

Sounds better than a game of craps.....

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Permalink Reply by BirdDawg, plain ole' idiot on December 13, 2008 at 16:07

The wind has been pretty good lately. Why doesn't Cubic go fly a kite?

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Permalink Reply by The_Baron on December 13, 2008 at 16:22

Maybe they tried, but it wouldn't fly.....Its hard to HBP land with crappy wells...

Permalink Reply by The_Baron on December 13, 2008 at 16:23

The buzzards are already circling

Permalink Reply by BirdDawg, plain ole' idiot on December 13, 2008 at 16:30

Well maybe the buzzards will pick the meat off of this stinking carcass. They are just breathing up good air. Just like BIRDUSA.

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Permalink Reply by The_Baron on December 13, 2008 at 16:33

I hope so too.

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