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Permalink Reply by Skip Peel - Mineral Consultant on July 24, 2015 at 7:36

 I suspect that Sabine will attempt to hold onto the leases but not pay the royalty.  The leases are a valuable asset that they will want to operate or sell at some future time.  If you don't force their hand they will hold on to them as long as the court allows.

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Permalink Reply by Skip Peel - Mineral Consultant on July 24, 2015 at 9:44

Wholesale Spot Petroleum Prices, 7/23/15 Close
Product	Area	Price	Percent Change*
Crude Oil ($/barrel)	WTI	48.11	-2.4
	Brent	55.76	-1.1
	Louisiana Light	52.48	-1.7

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Permalink Reply by Skip Peel - Mineral Consultant on July 24, 2015 at 11:21

Stock price: XCO (NYSE)

$0.62 -0.07 (-10.68%)

July 24, 2015 at 5:23:33 PM EDT

 

Stock price: HK (NYSE)

$0.93 +0.03 (+3.02%)

July 24, 2015 at 4:02:28 PM EDT

 

Stock price: GDP (NYSE)

$0.94 -0.03 (-3.39%)

July 24, 2015 at 4:07:34 PM EDT

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Permalink Reply by JHH on July 25, 2015 at 14:46

I received the Penn Virginia assignment request.  The company is Covey Park Energy LLP out of Dallas.  Been in operation since 2013.  According to its web site... most of the holdings are in Robertson, Leon, Madisonville and Brazos counties in Texas. The East Texas assets will be the first for Covey Park in our area.  I've sent a letter requesting plans for continued good maintenance of the Penn Virginia wells and any plans for development of the leases.  I know... don't expect any answers. 

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Permalink Reply by JHH on July 24, 2015 at 14:37

Hope you are correct... but I heard today of a neighbor who got her minerals back.  Sabine stopped paying royalties and after a time... not sure how much... got a release... and their minerals.  Very sad for all.   Also... Penn Virginia is sending out assignment letters following the sale of its East Texas assets.  I expect to get my letter tomorrow.  will update as developments occur.

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Permalink Reply by Skip Peel - Mineral Consultant on July 24, 2015 at 16:04

Morgan Stanley thinks this could be the worst oil crash in 45 years

Corey Stern  Jul. 24, 2015, 6:12 AM  .businessinsider.com

Back in January, Morgan Stanley drew similarities between the current oil crash and the one in 1986— when oil prices fell 45%.

Though they have been making these parallels for six months, analysts are now saying that the current crash could fare even worse.

"On current trajectory, this downturn could become worse than 1986," Morgan Stanley’s Martijn Rats wrote in a note to clients on Tuesday.

"We have been expecting the current downturn to be as severe as the one in 1986 – the worst for at least 45 years – but not worse than that," Rats wrote. But now with oil rolling over again, it is starting to look like a worst-case scenario could be in play. 

While most of his initial predictions for oil were correct, Rats said the firm underestimated OPEC production so far this year. In February, Rats even predicted a market rebalancing later in 2015.

"We anticipated that OPEC would not cut, but we didn't foresee such a sharp increase," he wrote. "In our view, this is the main reason why the re-balancing of oil markets had not yet gained momentum."

Now, the forward curve of oil prices is suggesting that there will be little recovery in the coming years, as well as an industrial downturn worse than 1986.

Plus, Rats points out that if the oil crash does turn out to be worse than 1986, it will become the worst in at least the last 45 years. This means there will be no precedent for analysts to look at to make sufficient predictions.

"If this were to be the case, there would be nothing in our experience that would be a guide to the next phases of this cycle, especially over the relatively near term," he wrote. "In fact, there may be nothing in analyzable history."

After a few months of stable prices, West Texas Intermediate crude oil re-entered a bear market on Thursday. 

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Permalink Reply by Skip Peel - Mineral Consultant on July 27, 2015 at 1:23

Goodrich Petroleum Corporation Announces Sale Of Proved Reserves And Portion Of Leasehold In The Eagle Ford Shale

HOUSTON, July 27, 2015 /PRNewswire/ -- Goodrich Petroleum Corporation (NYSE: GDP) today announced that it has entered into a definitive agreement to sell its proved reserves and associated leasehold in the Eagle Ford Shale in LaSalle and Frio Counties, Texas for $118 million, subject to purchase price adjustments as provided for in the Purchase and Sale Agreement. The effective date of the transaction is July 1, 2015 with an expected closing date on or before September 4, 2015.  The Company is retaining approximately fifty-eight percent (~ 17,000 net acres) of its undeveloped leasehold in the play for future development or sale. The asset being sold produced an average of approximately 2,850 barrels of oil equivalent ("Boe") per day (~75% oil) during the first quarter of 2015. 

The Company expects to book a gain of approximately $50-60 million on the sale at closing after factoring in customary closing adjustments. The Company plans to pay off its bank revolver and retain the difference in cash from the sales proceeds.

Regarding the sale, the Company's President Robert Turnham stated, "The monetization of our proved reserves and associated acreage from our drilling efforts to date greatly improves our liquidity while maintaining a position in the Eagle Ford for future development or sale. Acreage retention was an important aspect of this transaction for us as it allows for additional future value creation from the asset in what we believe will be an improved oil price environment. The ability to pay off our bank debt and book the difference in cash in this difficult commodity cycle is an obvious benefit of the transaction as well. We continue to drive our well costs lower yet will remain conservative with our activity level, as we reiterate our full year capital expenditure budget of approximately $100 million, with sharply reduced capital expenditures in the last three quarters of the year."

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Permalink Reply by Skip Peel - Mineral Consultant on July 27, 2015 at 9:55

OKLAHOMA CITY, July 27, 2015 /PRNewswire/ -- SandRidge Energy, Inc. (NYSE: SD) (the "Company") announced today that it has fallen below the New York Stock Exchange ("NYSE") continued listing requirement that the average closing price of a listed company's common stock be above $1.00 per share, calculated over a period of 30 consecutive trading days. The Company received notice from the NYSE on July 23, 2015 regarding the deficiency. 

Under the NYSE standards, the Company can avoid delisting if, during the six-month period following receipt of the NYSE notice, on the last trading-day of any calendar month, the Company's common stock has a closing price per share and a 30 trading-day average closing share price of at least $1.00. The Company intends to consider available alternatives, potentially including a reverse stock split, in order to cure the stock price deficiency and return to compliance with the NYSE continued listing requirement. Under the NYSE's rules, if the Company determines that it will cure the stock price deficiency by taking an action that will require approval by its shareholders at the next annual meeting of shareholders, such as a reverse stock split, the six month period described above will extend to shortly after such annual meeting.

During this period, the Company's common stock will continue to be traded on the NYSE, subject to compliance with other continued listing requirements. 

The NYSE notification does not affect the Company's business operations or its SEC reporting requirements and does not conflict with or cause an event of default under any of the Company's material debt or other agreements.

Furthermore, the NYSE notice does not concern its requirement that a listed company have a market capitalization of at least $50 million. Based on the closing price of the Company's common stock on July 24, 2015, the Company's market capitalization was approximately $292 million. Any action such as a reverse stock split would not be expected to affect the Company's market capitalization.

Cautionary Note to Investors - This press release includes "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements express a belief, expectation or intention and are generally accompanied by words that convey projected future events or outcomes. The forward-looking statements include a description of our intention to consider alternatives to cure the NYSE continued listing requirement deficiency. We have based these forward-looking statements on our current expectations and assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments, as well as other factors we believe are appropriate under the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, including the volatility of oil and natural gas prices, our success in discovering, estimating, developing and replacing oil and natural gas reserves, actual decline curves and the actual effect of adding compression to natural gas wells, the availability and terms of capital, the ability of counterparties to transactions with us to meet their obligations, our timely execution of hedge transactions, credit conditions of global capital markets, changes in economic conditions, the amount and timing of future development costs, the availability and demand for alternative energy sources, regulatory changes, including those related to carbon dioxide and greenhouse gas emissions, and other factors, many of which are beyond our control. We refer you to the discussion of risk factors in Part I, Item 1A - "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2014. All of the forward-looking statements made in this press release are qualified by these cautionary statements. The actual results or developments anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on our Company or our business or operations. Such statements are not guarantees of future performance and actual results or developments may differ materially from those projected in the forward-looking statements. We undertake no obligation to update or revise any forward-looking statements.

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Permalink Reply by Krkyoldhag on August 24, 2015 at 1:25

IF the royalties are considered income to Sabine and debt or account payable to lease holders...that might be a protection for the owners.  In Chapter11 the debtor must stay current in paying debts incurred after the filing.

If they do not stay current they are not keeping to the bankruptcy agreement and can be forced into Chapter 7 or liquidation.

Guess we will see how this plays out.

I know someone who is talking about selling her interest in 7 chesapeak wells to one of those direct mail offers.

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Permalink Reply by Skip Peel - Mineral Consultant on August 24, 2015 at 1:32

I suggest that you get her to read this:

http://www.gohaynesvilleshale.com/profiles/blogs/fundamentals-of-mi...

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Permalink Reply by Krkyoldhag on August 24, 2015 at 1:43

I would NEVER sell..I going down on the Titanic with my mineral rights..Heirs can figure it all out later.

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Permalink Reply by Skip Peel - Mineral Consultant on August 24, 2015 at 1:46

She's not you.  Those who decide to sell deserve the help to get a fair market price.

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