As several have noted above, KEW is beginning to get active in the Schulenburg area. We are in the process of negotiating a lease with them. EOG has also put together a position in the area as well.
I have experience in dealing with KEW when I worked in the industry. They are a small private who typically flips acreage, but it seems this go around they plan on partnering with someone to actually drill some wells. Additional historical context, KEW took assignment of leases in this area back in 2017ish time frame, so they seem to have a reasonable degree of confidence about the area to make a re-entry.
First I have a website navigation question. How does one set preferences to display ‘newest posts first’? I feel so stupid scrolling all the way to the bottom just to see the latest posts.
Now on to business. 25 days ago I posted that we had received an offer to lease from KEW Drilling. As it turns out, we’re still fooling around with The Fine Print. We may be getting slow played but it’s the usual explanations of biggest tracts first, etc.
This morning there was another lease offer in the mailbox from Redhawk Oil & Gas LLC in College Station (or Tyler per the envelope). On the surface the terms are not as good as KEW and my guy has not looked closely at The Fine Print yet but a two horse race is better than a one horse race, right?
As I said previously I don’t want to state the terms until we’re done because it may all be BS and there’s no reason to get everyone in a needless uproar but for sure something’s going on. I hate to quote Shakespeare, but ‘The game’s afoot.’
We talked to them. This is the second go around for EOG to be interested in the area which is a good sign. They are, in my opinion, the best E&P operator in the Eagleford, if not the entire exploration business.
That being said, they’re not going to play games and be willing to negotiate all that much. You also run the risk of them leasing you and never having a well drilled. But, if they do drill a well, it’s pretty much a guarantee they’re not going to screw it up like Cypress did on the Bigham well.
A little off topic, but speaking of the Bigham well, did anyone ever get the story on the pipeline that was built all the way over there? It seemed like a pretty bold business decision by someone, almost like numerous successful wells were expected. Of course, it’s probably filled with spider webs at this point but its existence should seem to be attractive to prospective operators. I’m too lazy to research the answer, but does anyone know who the owner is?
Thanks for refreshing my memory on DCP. I see that it’s a natural gas gathering pipeline and so that should be a real enticement for any potential wells relatively close to that pipeline. I hear the the RRC is getting pretty touchy about granting flaring permits past their 45 day window.
My Guy talked to the Redhawk Guy and he said that they are indeed contracted to EOG to obtain leases. FWIW this is being done through the Corpus Christi office and not the San Antonio office.
Without being too specific (yet) the Redhawk offer was somewhat less than the one from KEW at the time it was done, but My Guy was told that they’ve already raised the terms to be more competitive. They seem to be willing to discuss The Fine Print as well. My Guy has a day job and hasn’t been able to really compare the leases yet so we aren’t sure about the bottom line but I’ll check back in when I know more.
I had some time to do a little research and learned that since 09/18/23 Redhawk has filed 233 leases in northern Lavaca County. These are generally bounded by Komensky in the SW almost to Oakland in the NE. Mostly all north of FM 532.
On a personal note, the wheels of business and industry seem to be grinding very slowly, especially because of the holiday and because My Guy went on vacation. But I’m assured that my Redhawk lease is still in the works. I can’t say for sure, but it seems that Redhawk is leasing NE → SW which seems backward to me.
And finally, I’VE SEEN A MAP. I can’t elaborate more, but this effort is much further than some pie in the sky coffee break project. Once my lease gets signed, I’ll be back with more information.
I’ve heard nada from KEW Drilling in over a month. The ball is in their court. Maybe they gave it up. At this point I don’t care especially since we never found out who they represent.
Thanks for the update. Ready to see these guys fill their plate in your area and then move their way West and a little further North. It’s been almost 10 years since not being able to wait to get up each morning to see what the oil news for our area might bring for the day.
Thanks again for the news!
I would be interested to hear more if you’re able to share later on what you saw. As for KEW, they represent themselves. They’re a small shop out of Dallas that have been around for a little while. They typically lease and flip but do partner to develop which they would plan to do in this area (or at least that is what they said they would do). And remember as I previously noted, KEW took 50% ownership in Santa Rosa’s position in this area back in ~2017, so this is their second go-around which in my opinion, is a positive sign.
I was going to hold off until I actually signed my lease but it’s due to happen next week so here goes. I’m signing with Redhawk with 3/2 $700/$700 and 22% terms. This is actually a little less than the other lease I got from KEW which was 3/2 $750/$750 and 22.5% terms. The main reason that we went with Redhawk is because we’re familiar with the final Lessee. I hesitate to say straight out who that is but if you look at some of the prior posts you can figure it out. We never could determine who KEW was leasing for. They’re pretty good at hiding the ball.
Redhawk was actually pretty flexible with some of their Fine Print which I would have never addressed in the first place but My Guy knows all that stuff, and the back and forth is what caused the delay for me. Results may vary.
There have been several leases by Gulftex in addition to KEW and Redhawk. Gulftex is not Baytex (who bought out Penn Virginia).
Most of the leasing (that interests me) is in the eastern portion of Thomas Taylor, the southern portion of Crier, and the western part of Burnham. In other words from about St. John to the East Navidad and then up to the southern outskirts of Schulenburg. (In addition to all those in Lavaca County.)
Like I said somewhere above, I think that this is far past the Wishful Thinking stage. I heard the term ‘commence operations’ which sounds pretty promising.
Finally I hate to even mention this because I’ll look like a real doofus if it’s something else but put 4577 FM-957 in your maps app. Could it be a pad site? Or just a stock tank or fallout shelter or something else completely unrelated? Time will tell.
June 2024 saw some more leases filed for tracts in southern Fayette.
Kew Drilling filed for tracts in Abstracts 4, 19, 38 and 96 south and southwest of Schulenburg.
Baytex filed for tracts in Abstract 235 north of Flatonia.
Gulftex filed for tracts in Abstracts 14, 19 and 96 southwest of Schulenburg.
Redhawk filed for tracts in Abstracts 14, 19, 24, 38 and 96 south and southwest of Schulenburg, and for tracts in Abstracts 4 and 36 west and northwest of Schulenburg.
And, Rosewood Resources filed for tracts in Abstracts 76, 180 and 318 north, east and west of Flatonia.
