Leasing on "Hold" ?
I received a phone call this evening from a professional in the O & G business (a friend), he told me that some companies have stopped leasing at this time and if I had offers on the table, I needed to seriously consider them. I don't and I didn't. But he had some offers "dry up" today from Petrohawk and CHK. Anyone else with this experience?
Views: 270
Replies to This Discussion
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Permalink Reply by JB on -
The $8 is during the summer months they build up supplies. However, if that tropical storm in the Atlantic gains strength and moves to the Gulf we'll be looking $13 again.
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Permalink Reply by P.G. on
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How long would it be if the O&G offers dried up before the unleased land owners started freaking?
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Permalink Reply by Dorcheated A1 on
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Speaking for myself never, it doesn't matter if it's 1 year or 5years at some point I will get the price I want, not the price they give me.
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Permalink Reply by Amy Brehmer on
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So the O&G reps coming out with their pitch, 'we don't need you to sign because we have all we need in this section, but we're giving you a fair opportunity to take part in the royalties' is hogwash?
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Permalink Reply by Ed Hill on
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Amy,
I have been in this business a long time. If they weren't interested in leasing you, they still wouldn't be contacitng you. If they do have plans to drill a well in your section, the operator will want to have as much acreage, no matter how small the tract is, under lease because its helps their net figures to have as much acreage under their control.
If you have read some of my other posts to this site, I make no bones that I make my living from the oil industry. I have had my battles, if you will, with persons such as SnakeStewart, etc. (I consider good old Snake a friend now) who seem to take the myopic viewpoint that the oil companies are all out to screw you and who view this particular play as being unlimited and timeless. Oil companies work off of profit margins and they are the ones who take all of the risk to get the product out of the ground. I am all for landowners obtaining a fair bonus and royalty for their lease but some at some point, if landowners insist on pushing the envelope, the golden goose will fly away. Don't believe all of the posts that you read about how if you steadfastly holdout, you will reap the rewards of waiting. I've personally seen downside of the big plays ("elephants" as they are called in the industry) such as the Tuscaloosa Trend in the late 1970's, in the Vernon Field Cotton Valley play in Jackson Parish in the early 2000's and most recently in the Barnett Shale play in various counties up arounf Dallas.
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Why would you not want to take a fair offer now and put that money to work for your via some type of investment? A dollar today will be worth less tomorrow because of inflation, so if you would wait a year or 2, the money that you get will be worth less than the present day value of a dollar. It's just simple economics.
Because I am curious, just what is the price that you are holding out for?
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Permalink Reply by Dorcheated A1 on
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Ed,
I really wouldn't get interested until they got around $25,000. People on the Barnett Shale. The cities of Shreveport and Bossier all have made more money than that. Why? would I think my gas is worth any less.
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Permalink Reply by Martin on
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Ed -- Not only will you suffer from inflation, but there is the cost of lost opportunity that you missed by not having cash in hand to make a desirable investment --- such as gold, silver, or shares of Petrohawk.
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Permalink Reply by po boy on
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I was Kidding when I made the last post.
The gas isn't going anywhere, until someone goes and gets it. It is as simple as "Pay me now, or Pay me Later!"
The value of any limited resource can only go one way-Up.!
There will be price corrections, and re-alignments, lows and highs like any commodity , but like every commodity, at the end of the day it will be higher.
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Permalink Reply by kmfioc on
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Remember the 80's? Never know what will happen in the oil business. Can be valuable today and worth nothing tomorrow. You seem to have it all figured out though.
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Permalink Reply by Dorcheated A1 on
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Unlike the 80's, we are now turning away from fossil fuels more. With the grow of China and India at some point we as a country will turn more to natural gas. Which means they will becoming for my mine sooner than later.
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