The drop in oil prices last year has had a ripple down effect throughout the industry including a reduction in national and regional rig counts and fewer drilling permits being issued. But oddly, the same thing is not true of leasing activity.
According to DrillingInfo (DI), the volume of leases so far in 2015 has stayed on par with 2014. The company’s analysis shows that they have already processed 56,396 leases for the first quarter of 2015 with many counties still to go. This compared to the entire first quarter where they processed 64,638 leases.
Silas Martin from DrillingInfo concludes that “ Companies are looking to gain leaseholds while the market is still sluggish and unleased minerals are valued at today’s commodity prices, ultimately concluding that by the time these new leases mature to producing wells, the market will have rebounded.”
Data for 2014 Q4 and 2015 Q1:
Bakken:
18.6% Increase in Primary Term (43 mo. to 51 mo.)
21.1% Decrease in Royalty Interest (19% to 15%)
Eagleford:
86.5% Increase in Primary Term (37 mo. to 69 mo.)
16% Decrease in Royalty Interest (25% to 21%)
Permian:
17.9% Increase in Primary Term (39 mo. to 46 mo.)
13.1% Decrease in Royalty Interest (23% to 20%)
Niobrara:
47.1% Increase in Primary Term (51 mo. to 75 mo.)
- 6.3% Decrease in Royalty Interest (17% to 15%)
Read more at drillinginfo.com