My family has mineral rights leased out in both Lynn and Dawson Counties. The majority of these mineral rights were eventually assigned to Shell Oil by the original lease holder. These rights were leased out close to two years ago. Has anyone heard any updates about Shell's general plans for their holdings in these counties? I check the Texas RRC website routinely but have not seen any activity in this area for Shell Oil.
I don't know specifically, but if you look at the leasing activity in this area of West Texas, back 4 years ago the futures price of oil jumped to $140 per barrel. Then leasing activity picked up in the area and continued for 2 or 3 years. So if there is a possibility that the price might jump up to that level again, West Texas becomes a profitable place to drill. Until then, companies like Shell have enough in cash reserves to just lease up land for the future just in case oil jumps to that $140 level. If you look at the Texas RR Commission site and see how few wells are actually being drilled though in Lynn, Terry, and Lubbock counties, you would probably agree with my theory. They are just holding the land in case the price of oil shoots back up to $140 per barrel.
That sounds like a reasonable explanation.
Robert Tilden said:
I don't know specifically, but if you look at the leasing activity in this area of West Texas, back 4 years ago the futures price of oil jumped to $140 per barrel. Then leasing activity picked up in the area and continued for 2 or 3 years. So if there is a possibility that the price might jump up to that level again, West Texas becomes a profitable place to drill. Until then, companies like Shell have enough in cash reserves to just lease up land for the future just in case oil jumps to that $140 level. If you look at the Texas RR Commission site and see how few wells are actually being drilled though in Lynn, Terry, and Lubbock counties, you would probably agree with my theory. They are just holding the land in case the price of oil shoots back up to $140 per barrel.