Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2009 at 10:04

Samson Energy website link courtesy of sesport: http://www.samson.com/index.html

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Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2009 at 11:56

At $3.85 per Mcfd (today's ng spot price), those operators, possibly including Samson Contour, who need an asset sale or a joint venture partner may be looking beyond the current Shale Players. With a meaningful rebound in the price of ng probably 12 or more months away, will this spring/summer be the beginning of the "fire sales"?

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Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2009 at 12:26

Jim. That's good to know but would you care to offer any explanation regarding the significant number of drilling unit applications as compared to the extremely meager actual drilling activity? Does SC's leasehold terms allow for a rather slow development program?

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Permalink Reply by jffree1 on March 9, 2009 at 12:30

The standard lease put forth by Samson Lone Star (Texas sister company) has verrry teeny tiny print and is heavily weighted in favor of Lessee, which is why its called a "producers" '88, or whichever edition they are using. I advise just having your lawyer start from scratch, if you think you'd like to deal with them. Make sure you have the surface and environmental protections in the lease as well as depth or severance clauses that you think you need. I assure you that their lease does not include anything which benefits the landowner other than their tiny bonus and royalty offer (yes, I got out a magnifying glass and read the WHOLE thing). Let them ammend your lease if they don't like it the way it is, and not the other way around. And then make sure your lawyer reads the ammendments before you sign it also.
I did not sign with them when they approached me. They came into Sabine County making offers of 150.00 an acre and 1/5. That was their second offer. First was for 100.00 and 1/5 (in May or June last year when other companies were offering 5K and 1/4 for undeveloped acreage) . Both of those offers were sent by mail and included a cover letter, the lease form, a bankdraft for the stated amount (but wrong acreage) and instructions on how to SIGN THE LEASE, MAIL IT BACK, AND WAIT FOR YOUR LITTLE BITTY CHECK. The first offer? Well...my paper monster ate it (I think). The second one? I still have it as an example of what NOT to sign.
I did call them...once. When I asked about their intentions as to depth, I was told (after they determined that I knew about the shale) that they only wanted 6800' feet and above and would give me a depth clause. Doesn't sound like a shale operator to me. After I told them that they needed to make a bit more competitive offer ,even for just 6800', I never heard from them again. I don't know for sure what their intentions were but I suspect "blockbusting" as Devon was active in the same survey and adjacent ones, at that time.

More later...I have to go feed my ponies!

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Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2009 at 12:45

The majority of SC's HA unit applications are not in the Armistead area.

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Permalink Reply by jffree1 on March 9, 2009 at 13:01

That's the truth, Jim. I just don't advise signing one "AS IS". No offense. And they are very capable operators, making some pretty good wells over here as well. I just didn't understand (at that time) why, with the offers being made, they would try that "lowball" routine. Eight months later, I understand your business a little bit better, though no expert, by any stretch of the imagination.
Actually, that form may have been developed by Placid oil in the thirties, however, the "88" came from the changes made to the standard form in the 1988 version, or edition, of that form. There have been many "editions" of that standard lease since the thirties.

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Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2009 at 13:39

To help put the level of Samson Contour's HA unit applications in a perspective that I think most members will relate to, Petrohawk and affiliate, KCS Resources, have a current total of 65 sections covered by Drilling & Production Unit orders. Four less than Samson Contour. Though I do not have a current total of HA wells permitted, drilling or completed for Petrohawk and KCS, I know that it exceeds SC's five by a wide margin. Yes, private companies can do as they wish without publicizing their intentions. But GHS has always made a point of delving beyond what is made public in regard to the development of the play.

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Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2009 at 14:05

Jim. Secrecy has been a hallmark of energy companies for the duration of the industry's existence. The Haynesville Shale play may not be the first to generate this much publicity but I would opine that it is the first in the age of wide spread Internet connectivity. The fact that you have "never had any luck getting anything out of anybody at Samson" makes me that much more curious. We may never divine SC's plans for the HS but it may be of interest, and possibly value, for the members to share pertinent information. Seems to me that Samson Contour is biting off a shale sandwich that they are incapable of consuming.

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Permalink Reply by Skip Peel - Mineral Consultant on March 9, 2009 at 14:25

Jay. My suspicion is that Samson does not intend to be the operator of the D&P units they have applied for. And that many other marginal operators have been employing a similar strategy. I further suspect that the strategy looked good in the late summer but much less so now. Samson Contour stands out to me because they appear to be continuing a strategy that others have abandoned. It makes me curious.

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Permalink Reply by J. A. on March 9, 2009 at 16:05

Jay I hope your wish works out. I think I am going to let go and let God.

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Permalink Reply by Skip Peel - Mineral Consultant on March 10, 2009 at 1:16

I share your concern about relevance and tone. I try to ignore those who are interested in subjects other than the shale and avoid those posters who have a chip on their shoulder. I think we have both been involved on the site long enough to know that there is a majority that share our focus and appreciate input from those in the industry when it is offered in a respectful manner. We will always have to put up with those who suspect ulterior motives behind our posts. There are a number of subjects that I believe should be discussed and have relevance for many members. I plan to discuss them regardless of the fact that some will find them negative and others may accuse me of using them to disappoint landowners and drive down lease expectations. The conspiracy crowd maintains a firm foothold here on GHS. Of Samson Contours 69 sections included in unit orders or applications, 21 are located in either the Caddo-Pine Island or Longwood fields. Your posts regarding the northern limits certainly apply for those sections. SC also has 8 sections in the Greenwood-Waskom Field. The remaining 40 sections are in the Sligo, Bracky Branch, Martin and Grogan fields which are located in or close to the generally accepted core area of the shale. I hope we get a little more input before this topic disappears from the main page.

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Permalink Reply by Skip Peel - Mineral Consultant on March 10, 2009 at 2:37

Yeah. When the main page is in that mode, you have to click on "Talk Shale" at the top. Have you contacted Keith? He can't monitor all the posts and really does value feed back. Unless there is a benefit that I haven't recognized, I would prefer to go back to the previous format.

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