Is there a well on my property?

Ownership and Title
21


r w kennedy said:

Good evening Pamela, I hope you have been well.

Lario is an operator who could actually drill wells and with that being said, it depends on their stake in the spacing whether they will be permitted to drill a well or not as the company with the greatest leasehold has first dibbs on it. It does not have to be a majority, just the largest leasehold. Lario appears to like to take positions and be the non-operator as much as they like drilling wells and also assign areas they have started development on to larger players. Pamela, Lario may not even hold your lease anymore, they could well have assigned it to someone else for a quick profit at some point in the past or more recently want to unload it on someone else because the area has not been active recently and getting some of their money back would be better than nothing.

Pamela, I looked at the GIS map and I don't see where your spacing has been permitted in the time period of your lease. I see no permits within miles of your spacing and no rig symbols. I think this is probably because of the success that Samson had in the area. The nearest well to 162-92-35 was drilled just south of your spacing from 161-92-13 by Samson and they tried hard in my opinion to drill a good well 40 frack stages, no mention of ceramic (artificial propant sand) but went to a fair amount of expense and effort and the results were only ok, 33,658 bbl oil in 8 months, on pump from the start and down to 2,682 bbl oil in April. This Samson well is going to be profitable as long as it keeps producing but 6-7 years or more is not the payout companies really want. Lario wants to drill wells that are home runs, if they drill a well that is not a home run, it looks like they would rather pass it off to someone else to operate and recoup their investment so they can search for more home runs and speculate on more unproved acres.

Pamela, $300 per acre is low for acres you intend to drill but to a smaller operation it might look like money out the window or good money after bad if the area is inactive because they could always come back and try and lease you for $600 if things look up 5-6-7 years from now.

Pamela, that is what I see, there is oil to be had there but your spacing is probably far down the priority list. Have a great evening/morning/day,

Robert

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Good Evening R W, Thanx for answering all my concerns/questions. After reading your reply, I called Lario who told me that they sold my Lease[Burke County,162,92,35] to EnerVest. I was not able to make a connection with EnerVest to find out what’s happening. Do you have ‘a story’ to tell about EnerVest??? Once again, have a Great evening. Respectfully Pamela F. Peterson

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Good evening Pamela, let me get back to you about Enervest, I seem to recall something about them but I want to confirm it before I say more. If it's what I recall, it will come back to me shortly or appear in a keyword search.

Robert

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Interesting read about EnerVest..............

http://www.farmanddairy.com/news/trumbull-county-landowners-sue-north-coast-energy-and-enervest-over-gas-leases/38974.html

Clint Liles

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Good morning Pamela,

I remembered hearing that Enervest could be difficult to get in contact with but that could have been their local east coast office. It would not be unusual for an oil/land company in any case.

Following Clint's link above, what I found troubled me, that corners were cut in the notarizing of a lease or leases when there was a simple legal remedy, to get a notarized signature on a ratification. I am going to presume that the notaries worked for the lessee or their assignee, because the average notary down the street will not swear falsely that the person signing appeared before them when they did not because they could get in alot of trouble. This means that someone had to conspire with the notary to get them to notarize the lease when they should not. Conspiracy to commit even a misdemeanor is a felony. The only reason I can think of to commit a felony when there is a simple legal remedy such as getting a ratification, is there must have been some reason why they could not get a ratification, such as they never paid the mineral owners.

All oil companies bear watching. I would watch very closely one that would commit multiple felonies to fix a previous misdeed that was only a civil matter.

Pamela, if you do not receive the extention payment by the last day allowable according to your lease, plus 3 days for mail, I would have the affidavit saying that payment has not been received ready to notarize and send off to be recorded. A lease that was suitable 3 years ago may not be suitable anymore and it might be best that the old lease die.

New leases should contain protective language, that payment of bonus and royalty within specified periods of time are conditions of the lease, without which the lease expires. With broad disclaimers of warrantee of title and the lessee leases at their own risk. (thank you Buddy Cotten) Even if your title is impeccable, the disclaimers of warantee are necessary so they can't say your royalty was held by some title issue, which they can't if title issues are irrelevant. Todays leasing enviroment is different in that you must specify how you will be paid or you may receive pennies on the dollar of what you should be paid. Payment should be a condition of the lease without which the lease expires according to it's terms regardless of the "mere chance of future royalty" which the courts have said is enough consideration to "save" a lease. Short 60-90 day continuing operations grace period, cumulative shut in period of 2 years. Bargain for royalty with no deductions other than taxes. Deductions can cut your royalty check by 25% or more and you have no control at all over what the operator charges you for deductions, so even if it's a lower royalty %, you have slammed the door on charges you have no control over and for which you have to "trust" the lessee/operator. We have been through the trust subject before? I recommend you trust them only half as much as they trust you Pamela.

I think I am saying I would let this lease die without trying to get the assignee to pick up the option. If they still want the acres, they can always lease you again, but this time you could demand some things that cost the lessee nothing as long as they do as they are supposed to do, that probably are not in your previous lease.

Have a good morning and great day Pamela,

Robert

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Good Saturday Afternoon RW, Sure could use some Summer heat here in ME. The other day, I received ‘a fishing letter’ from Aegis Energy Partners in Denver CO asking me if I would be interested in selling my Mineral Rights in Burke County, Twp 161 North, Range 92W, Section 2. What if anything have you heard about Aegis Energy Partners??? Also, if I was to nibble, where should the starting dollar range be located in today’s market place??? What is your philosophy as to Leasing/Selling more than one(1) ‘Section’ at a time??? Unfortunately, I have several Leases that contain multiple Sections. Going forward, can I change that to just one(1) Section??? Once again, Thank You for being available to discuss my situation and to learn more about this business. Respectfully Pamela F Peterson

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Good evening Pamela,

I suppose that Aegis could make you a decent offer but I doubt it. They spam me occasionally and their offers were about 1/3 of what I have been offered lately. Even if I were interested in selling, I would not respond to offers so low because I wouldn't want to spend my time negotiating with them to ultimately reach an offer too low to seriously consider in the end anyway.

Pamela, these companies will buy just a few acres if you only want to sell a couple of acres. They will offer a price that they believe would prevent them from losing money and which they would recover in 3-5 years or less, alot less time if a new well were to be drilled.

Pamela, lease, then sell is in my opinion poor strategy. When you lease, you convey 80% or more of the value to the lessee for the lease bonus price and all you figuratively have left to sell is the royalty interest. Once you have leased and a producing well is drilled, your acres have lost alot of sale value but are derisked. These companies want to buy your producing, or acres near production at prices that they believe will not allow them to lose.

Pamela, if you need to sell I would get multiple offers and or list what you want to sell at auction. You have Bakken under your acres, probably not the best but it's a sure thing and nobody is going to pay as much as they think it will bring in more than 3-5 years. You would also lose out on any future wells. Leased, producing mineral acres should only be sold as a last resort in my opinion, and to a family member if possible.

It can't hurt to open a dialog, with buyers but don't be disappointed of the offers are really low and it should provide plenty of paper for lighting the grill in the summer and fireplace starter in the winter.

Have a good evening and a better tomorrow Pamela,

Robert