Replies to This Discussion

Permalink Reply by adubu on October 30, 2009 at 9:28

Carl---on the RRC TX Map the A-210 in Nacgodoches County is the J. Fulcher Survey just East of town on hyw 21--something doesnot match look up the Abstract # again to verify

Permalink Reply by jffree1 on October 30, 2009 at 9:44

adubu, I think it's supposed to be A-201 instead of A-210.
A. Emanuel, A-201 and A-202 appear in a search for "Emanuel".

Permalink Reply by Carl Turner on October 30, 2009 at 15:26

Sorry it is A-201

Permalink Reply by Alamo on October 31, 2009 at 5:57

Carl,
Recently, Goodrich Petroleum (GDP) drilled 2 wells just south of the A. Emanuel Survey, A-201 that have established 2 new field designations (newly discovered productive formations)

GDP Tucker #1 in the Naconiche Creek (Haynesville) Field in the H. Richey
Survey, A-463. The RRC has numbered that field 64300 280

GDP Hill GU #1 in the Naconiche Creek (Bossier) in the Jose Cardova & Bros
Survey, A-20. The RRC has numbered that field 64300 100

Without knowing what your particular situation is, here's my advice based on my own experience in the Naconiche Creek (Rodessa-Travis Peak Consolidated) Field. I leased an undivided 1/2 interest in 266 acres in 2005 for a 20 per cent cost free royalty and $200 an acre. (The other 1/2 owner got a 25 per cent royalty deal and I don't know what they got an acre in bonus money) A well was completed with initial production of 1.25 mmcf. Currently with the depressed natural prices the monthly "production" has dwindled to 4-5 mmcf. So, at this point that is a good well that is being marginally produced due to pricing constraints.

Clearly, that acreage is now being held by production and will be developed at some future date depending on what the price structure does. The greatest error I made in the 2005 lease was in failing to include a depth limiting clause in it. At the time I leased there was no widespread knowledge of the Upper Jurassic production potentiality--and of course the O&G people weren't offering any advice in that regard. Had I included a depth limitation, I likely could have leased it last summer for considerably more and increased my royalty retention to the present 25 per cent going rate. Live and learn.

Your location within the A. Emanuel Survey is in a good productive survey and I hope you can get a top offer---bonus and royalty-wise. My most recent leases damn sure have depth limiting clauses and its also a good idea to shorten the term as much as you can negotiate.

Finally, keep in mind that with current exploration technology--3 D seismic etc, gas well drilling has an almost 100 per cent success rate. If Devon wants to lease your property they know it's productive, so hold their feet to the fire. They know that the Naconiche Creek has several productive formations--or they wouldn't be wanting your lease rights. Unless I got "Upper Jurassic" money and a minimum royalty of 25 per cent I would be hesitant to
sign.

When I began this epistle, I said I did not know what your particular situation was, but wanted to offer you a sad learning experience I "enjoyed", and hoped it would have some relevance to yours. Remember, so called "Free Advice" is often worth exactly what you pay for it. But a true axiom is the deeper the lease terms, the more the mineral owner should receive. A lease to 14,000-15,000 feet or so is considerably more valuable that one to 8,000-9500 feet. Its all about rights of exploration--the "more the O&Gs get---the more you are entitled to!

Hope this helps and good luck.

Permalink Reply by RBH on October 31, 2009 at 14:13

Carl,

You might also want to contact either EOG or Petrohawk who are both leasing/drilling right around there also.

Permalink Reply by Carl Turner on November 1, 2009 at 12:45

Thanks for all the input. I just have 2.8 acres so I am a small player and probably do not have much bargaining power.
One clause in the lease states that I will have to pay 1/5 of the cost for all compression, treating, dehydrating, and transporting cost incurred in marketing the gas. I have a friend in the gas business and he said those cost could be jacked up and end up costing half of the royalty money and I should have a cap on those cost, maybe a limit of .30 per MMBTU.
Limiting the marketing cost and trying to bump up the royalty from 1/5 to 1/4 is the direction I think I will take in negotiating the lease.

Permalink Reply by DJG on November 9, 2009 at 8:53

Could be worthwhile for you to spend some time searching current leases at the County Clerk's office either in person or online if Nacogdoches offers the service. I would imagine that you can find recent contracts that have been filed where the improved back-end terms that you are pushing for have been approved. Should help you in your arguments to get those terms improved for your own lease.

Permalink Reply by Hotdoc on November 4, 2009 at 2:51

This is way too low if you can hold out. Devon is going around preying on those that do not know the facts of the situation. They were paying 5000 and 25% around me just a few months ago and that will return shortly if you can hold out. As prices go up, so do the lease amounts and gas is on the rise. I am very close to (<3 miles out of Nac Co) Nacogdoches Co..

Permalink Reply by Alamo on November 5, 2009 at 8:04

Hotdoc,
Where are your minerals situated? Sounds like you are in either Rusk or Shelby Counties. I have minerals in Trawick, Douglas North, Ezim, Naconiche Creek and Appleby North with minerals open in deep zones in the Caison (Rusk and Nacogdoches Cos) and Luther and Lollar Surveys in Rusk Co.

Alamo

Permalink Reply by Hotdoc on November 8, 2009 at 10:25

I am in Western Shelby. I found this on OilVoice.com and thought it was interesting.



Price Of Poker Higher In Haynesville Shale In Southern Part Of Texas


The price of leases left to be leased or to be bought from others holding leases will go higher now because of the huge Devon well in San Augustine County, Texas. Prices could go as high as $30,000 - $50,000 /acre because that is the price that has been paid in Desota Parish,La this year. That Parish doesn't have all the payzones that are present in Sabine, San Augustine and Shelby Counties of Texas. The earthquakes in the area that busted up this haynesville shale and the other formations above it back in 1847-1999 should get most of the credit as to this huge well. There were several that measured above 5 on the richter scale in this area. One could argue this, but you better do your homework first. Almost all of the major oil and gas fields in Texas are present where earthquake's have been recorded to date with a 5 or greater on the richter scale.

Posted by Jurassic Exploration Inc on 03 November 2009 02:22

Permalink Reply by Hotdoc on November 8, 2009 at 10:35

I am in western Shelby County. Devon has the land leased around me but I have 200 acres with one attached neighbor holding out also. Devon leased attached land for 5000/acre at the beginning of the downturn but came back after the downturn with 500 and 20. I hung up on them when they whined about the gas prices. I will not lease for nothing when I know I am loaded with gas and oil. The same gas and oil that they paid 5000/acre for. We are in a fault area near the edge where Devon has told me that they think massive gas should be. They said that they drilled one on the other edge of the fault < 3 miles away that had so much pressure that they had to cap it. I would give my eye teeth to get my hands on my 3D seismic. SW has called and said that they are interested and will be giving me an offer shortly. There are others looking also. I refuse to be in a hurry to lease.

Permalink Reply by DJG on November 9, 2009 at 8:38

Hotdoc,

Which survey are your minerals located at in Shelby County? Sounds like you might me near my family's unleased minerals also in Shelby County. Would be interested to compare notes with you...