The Curious Case of SAMSON CONTOUR

Recently several members have asked me about Samson Contour. I originally ran across SC while researching my blog post on the history of the Haynesville Shale. The first recorded Haynesville application that is in the core area of the play, and therefore shale as opposed to sand, was filed by SC on January 9, 2007 for 3 Drilling & Production Units in the Martin Field, Red River Parish. That application hearing was "Not Held". I see no other SC unit activity related to the Haynesville Shale until Sept. 30, 2008, twenty months later. Fourteen months after other operators had begun applying for HA units.

Since Sept. 30, 2008, Samson Contour has applied for HA unit designation covering 69 sections scattered over the play. It would seem they are making up for lost time. The question on the minds of many landowners and GHS members is one of capability. Technical and financial. Does SC really plan to be the operator in these units? Or is this unit application process an attempt to lure a larger, more capable join venture partner(s).

If you will excuse the amateurish cut and past job and hand written notes which follow in the attachment, review some of the information on SC that is available on SONRIS. The top portion of the list are wells by SC since Nov. 2007. There are fifteen total. I have noted three as status code 03 (Permit Expired), one as status code 18 (Temporarily Abandoned Well) and one as code 29 (Dry & Plugged). Of the remaining ten, three are not within the bounds of the Haynesville Shale prospective area. Of the seven left, five are permits though probably drilling and two are completed and producing wells. Samson Contour has one producing Haynesville vertical well and zero completed horizontal Haynesville wells.

I invite the members to join in a little group research project to find out more about Samson Contour. The parent company is Samson Energy and a division, Samson Lonestar, is active in the E. TX. portion of the play.

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Permalink Reply by BirdDawg, plain ole' idiot on March 12, 2009 at 10:00
Personally I would HATE to see Samson Contour drill my HS. They are a joke in this play.
I would recommend that they drill Jay Murrells interest, and he would be happy with their poor production and little bitty checks. Or more than likely, no check at all. I'm sure he could justify it.
Permalink Reply by Skip Peel - Mineral Consultant on March 12, 2009 at 11:03
BD. Have you had personal dealings with Samson Contour? The only responses that I have received thus far in this thread seem to indicate positive experiences with SC.
Permalink Reply by BirdDawg, plain ole' idiot on March 12, 2009 at 13:26
Skip,
No I have not had personal dealings with the. But, in my opinion, the cold hard facts of the time they have had their units, etc., and thrir drilling program, or lack thereof, makes them a compa that I would not want to see in my units. I can assure you that their are others I don't want to see there, but they are already there. With my luck they will farm out to SC.
Permalink Reply by Highwayman on March 13, 2009 at 11:12
Skip,
Thanks for bringing this topic up. We have been leased to Samson since May 2005 in the Martin Field. According to your research, we are in one of the first three HA (Jurassic) units to ever be unitized, S35, T14, R9. The lease runs out in May 2010 and we were, like you, wondering what was up with this company. Our location seems pretty good and Encana is very active just to the south, but nothing in our immediate location yet. They better hurry up, it won't go for $150/acre again. Let me know if you find out more.
Permalink Reply by redrivergal on March 13, 2009 at 12:56
We, too, have land/mineral rights in this area of the Martin field, Red River Parish, Sec. 35, T14N, R 9W. We have been leased to Encana since June 2005; the lease will expire in June 2010. I don't think ours will go for $100 per acre again either.
Permalink Reply by Skip Peel - Mineral Consultant on March 14, 2009 at 4:12
Highwayman & redrivergal. If natural gas prices remain depressed through 2009, it will, IMO, be economically difficult for Samson Contour to get their extensive leasehold drilled. Especially if they continue to apply for additional HA Drilling & Production Units. Even at the minimal development level of a single vertical well per section. As to your general area, I would suggest that you stay in communication with your neighbors and be on the look out for Samson Contour approaching their lessors for lease term extensions. I may be sooner rather than later. Right now with slowing development and depressed prices, SC may think that they can get extensions cheaper than a year from now when conditions may be improved. As to your specific tracts, check well permits on SONRIS at least twice a month to see if Samson Contour will drill your section before your lease expires. Do your homework, keep lines of communication open, monitor Samson Contour activity in your area and give some thought as to what you would require to grant an extension or if you would prefer a different operator in the event that becomes an option. If Samson Contour does not give indications of impending development in your area in the near future, you will probably receive some "top lease" offers from other operators with interest in your area. Not just Encana. Be prepared and be patient. Good Luck.
Permalink Reply by Skip Peel - Mineral Consultant on March 14, 2009 at 6:51
Thanks, Jim. It is not my intention to infer "Mom and Pop" status on Samson Contour. I am aware of their Texas activity under the Samson Lonestar name. It is good to know that they have 4 shale wells. Even if they are not Haynesville completions. They are much less active in LA. according to SONRIS. Their plate has got a lot of shale on it and they aren't chewing very fast.
Permalink Reply by Highwayman on March 17, 2009 at 14:06
Skip,
What does "Top Lease" mean? Thanks.
Permalink Reply by Skip Peel - Mineral Consultant on March 17, 2009 at 14:20
Highwayman. When an O&G company has an interest in a tract that is under lease to another company but nearing the end of its lease term, they will offer a lease that becomes effective when the existing lease expires. A "top lease". The top leases that I am aware of paid a portion of the lease bonus "up front" that was non-refundable as an inducement for the landowner to execute the lease. As an example, if the bonus offer was $5,000/acre, the top leasing lessee might pay $500/acre up front. If the prior lease does expire, then the remaining $4,500/acre is paid and the new "top lease" is in force. The top leaser is betting that the existing lessee is unwilling or unable to drill to hold the lease.
Permalink Reply by Gale on June 13, 2011 at 18:47
We have and have had since 1993 about 16 wells with Samson Lonestar Limited. We have always been very pleased with the way they fulfilled the lease and with payment from them, however this last yr we have begun to have issues. I realize at times there will be issues, however I do expect direct, clear and to the point answers to all of my questions relevant to our interest in these wells. That, I'm sorry to say has not been so lately.
Permalink Reply by Skip Peel - Mineral Consultant on June 14, 2011 at 1:42
Gale, Samson Lonestar, though also a division of Samson Energy, seems to have a much better operating history than Samson Contour.  At least they appear to be a much more active and capable E&P company.  In any case, including yours, it is best practice to document and communicate concerning the management of your minerals and to seek professional assistance if such is warranted.  Even the best of companies change management and operating policies from time to time.  And past experience isn't always an accurate predictor of the future.  Mineral owners need to be informed, diligent and proactive.  Your next step should be a certified letter which is the first legal step in establishing your concerns and questions and creates a definitive time stamp.
Permalink Reply by Gale on June 14, 2011 at 12:34
Thanks Skip, I am the representative for the family which is about 15 people. We do have a oil and gas attorney we use and if I do not get the answers we ask answered we will turn it over to him. I guess it's just disheartening after all these years of them being so easy to deal with and being able to get straight to the point answers to see this change. We have had major issues with Chevron-Texaco through the years where they had our DOI wrong and I had to fight them almost daily to recover that money which was about 10 years of under payment ( this was 10 years prior to the time I took over as the family representative and I discovered this, it took me about 6-8 months of fighting C-T). Anyway thanks so much for your time in helping the ones of on here that need help!

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