Well spud on 9/3/16. Too early for production numbers.
Anyone have any production figures on the Shangri-La well in Sec. 24&25 of 15N-8W?
Yes, 15N-8W is a productive area. Quite a bit of horizontal activity in the last 999 days or so. The closest well to s 24 is the Juanita well in 14& 23. Completion at 730 bbls oil 1517 mcf gas in 2015.
In my opinion, whatever the offers are now, they are too low for the possible multiple wells per section that may happen in the future. Many sections already have multiple wells. I do not have current sales, but someone on the forum might know.
I just received a letter from Raintree Energy regarding Section 2, Township 16 North, Range 7 West, Kingfisher.
They state they are actively purchasing minerals in that area. Then, quote, “$7,750.00 per mineral acre, if your interest is leased on a 3/16 lease for the purchase of your minerals.” I am confused. Sell or lease?
Our family land has been producing oil and gas since the 1970s. Oil production ceased about 10 years ago and gas ceased last year. The operator plugged the well and removed the equipment last month. We have received a lease offer from another company. Below is the offer.
3 year term with one of the options.
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$1500 acre and 1/8 royalty.
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$1250 acre and 3/16 royalty.
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$1000 acre and 1/5 royalty.
How do we determine which is the best option to choose?
Diana,
They are offering to buy your minerals at $7,750 per acre assuming you are currently leased and the lease is on a 3/16th royalty. If you are not on a 3/16th the per acre offer could go up or down depending on the actual lease royalty.
Hope this helps, please make sure to get additional offers if you are in fact interested in selling!
I received pooling orders and responded, having heard the well would spud on Sept.29. I’ve tried to find any drilling permit and find nothing in that section or adjacent on OCCE search. Do drilling permits get filed later, after drilling?
At what point in the process would division orders go out (assuming they do go to owners.) Am just very curious about the process, and how to track progress, if that’s possible.
John,
The first number is what you will receive up front in the form of a bonus payment. Take that number and times it by the number of acres you have to determine the amount. The second number is the percentage of the revenues you will get if they drill a well and it starts producing. You need to decide if you are more interested in up front money or more money on the back end if and when they drill a well. I would go back and ask for $1500-2000 pre acre and 1/5 royalty. Remember, this is a negotiation not a final offer.
Is there a good reference outlining the dos and don’ts relating to the taking of a working interest in a pooled well in lieu of a bonus and royalty? What financial protections are in play.
For a great “free” GIS/Jeffersonian tool to plot Section Township and Range locations for properties the following website http://www.earthpoint.us/ is acceptable.
Shown: Kingfisher S35 T15N R5W SE/4
We just received the completion report for 9-16n-7w and it states that it’s producing 1231 bbd oil and 2931 cfd natural gas. Just thought this might help people still waiting in my area.
Gastar latest http://www.gastar.com/news/994545.aspx
Gastar selling off non-core southeast Kingfisher and northeast Canadian leaseholds. And in partnership to develop existing leaseholds in northern Kingfisher. Partnership will speed up development and help Gastar avoid bankruptcy.
"Gastar has entered into a purchase and sale agreement to sell certain non-core leasehold interests primarily in northeast Canadian County and also in southeast Kingfisher County, Oklahoma to a private third party for approximately $71.0 million (of which up to $10 million is contingent upon the satisfaction of certain conditions), subject to certain adjustments. The transaction is expected to close on or before November 18, 2016, with a property sale effective date of August 1, 2016.
“The sale of these assets will allow us to focus on and accelerate our core STACK delineation program in northern Kingfisher and southern Garfield Counties, Oklahoma, while significantly enhancing our liquidity position,” said J. Russell Porter, Gastar’s President and CEO… “Assuming completion of this transaction, our June 30, 2016 pro forma Mid-Continent area net acreage would be approximately 83,200 net surface acres, including acreage dedicated under our Development Agreement, with approximately 1,031 net STACK locations.”
“Upon closing of this sale, we expect to have ample liquidity to support our capital expenditure plans for the remainder of 2016 and 2017. On a pro forma basis as of September 30, 2016, and after payment of 20% of the Canadian County net sales proceeds to reduce revolving credit facility debt, Gastar would have a cash position of approximately $102.4 million.”
The sales price includes allocated value for 19,100 net acres and current production of approximately 181 barrels of oil equivalent per day from 25 gross (11.2 net) wells, of which 32% is oil. The closing of the proposed property sale is subject to the satisfaction of customary closing conditions.
DUCs in a row waiting
behind paywall
http://www.wsj.com/articles/energy-producers-edge-closer-to-tapping…
Here’s a slice:
"
U.S. oil and gas companies have drilled thousands of wells they have yet to tap, creating a ready reserve of fuel that could surge onto the market when energy prices recover.
As producers report quarterly earnings over the next few weeks, a question looms: When will they start exploiting these “drilled but uncompleted” wells?
While the industry often has an inventory of drilled wells awaiting completion, the backlog has grown significantly over the past two years as companies like Continental Resources Inc. and EOG Resources Inc. deliberately delayed tapping wells to wait for higher energy prices.
…
Federal estimates show the number of such wells in the nation’s seven most prolific drilling regions stood at 5,069 in September, up from 3,768 in January 2014, before oil prices began falling.
…
Ryan Duman, a senior analyst at energy consulting firm Wood Mackenzie, said he expects to see companies completing many of the delayed wells in the next 18 months.
Terri, look at the pooling order to see what the maximum days to drill are (usually 180 days to 365 days). The permit is supposed to be filed before drilling begins. Also look in the section to the north and south (usually) of your section. Sometimes the well surface location is not in your section.
Archie,
If you are not knowledgeable about the oil business, then the simple answer is DON’T participate. There are pros and cons to participating. Pros are an upside to the royalty received for sure and some tax breaks. However, the participant must be willing to lose every penny that they have put in, be willing to pay their share of operating costs for 35-40 years or more, have drilling insurance, have a good oil and gas attorney and a good oil and gas accountant. I can go into more detail if you friend me. I am on the Don’t side, but there may be folks on the Do side that can comment as well.
John Fisher, never go for the 1/8th. Of the other two options, it depends. The most important thing is to get a good lease. Not the one they send you for sure. I generally go for the higher royalty as in the long run, the bonus is usually piddly compared to the royalties.
M Barnes, thank you so much for your great comments here, and offline help via email.
You are so very helpful, and appreciated!!
Innovation in waste water disposal
http://www.bloomberg.com/news/articles/2016-11-14/rare-oil-patch-ho…
Blaine County Forum has some interesting reading.