To clarify, I’m not so sure it is Pacer that deals as the agent with Marathon, as that name just popped into my head and sounded familier.
I have noticed among Marathon Leases for that area, that it has been Pacer out of Colorado I think; that has done the leases for Marathon.
1099 ? Do you already have royalties from them? We had bonus checks from 2011 leases, but didn’t get any 1099’s. I’m wondering how our taxes will go this year, in comparison to previous years we leased. 2006 taxes didn’t seem much change, but the bonus amounts were small in comparison to 2011.
I need help understanding the bonus’ paid in yesterday’s auction. Why so little ( 6.00 to 130.00) when privately owned acres are getting 350.00 to 500.00? Is it as simple as location, location, location?
Tom,
I’m puzzled and question the same thing. I wondered what effect having 800+ parcels available for lease was huge, in comparison to previous auctions I’d researched. Also, when the State raised the royalty rate to 3/16, I again thought that will change the game, even though the 3/16 didn’t apply to counties such as Slope or Hettinger.
If you look back on the August 2011 Auction, there were several parcels within Slope County that sold for $1650 an acre. Several others that weren’t much less from that.
I hoped that trend would continue, but the above things I listed may have contributed to the lesser amount. Either that or the bidders had all come from a meeting where they all agreed to not bid stuff too high, for future purposes.
Of course, we know that didn’t happen, as several parcels from the northern counties went quite high.
For those in the Slope and Hettinger counties that have yet to lease or had leases not honored by Chesapeake, I hope that demand changes soon for the area, and they get a good offer from a good company that pays.
Snues, another thing that occours to me is to follow the money. Chesapeake may go on sprees when they have recently arranged a loan, for example the recent one from China. Chesapeake also seems capricious in nature in that they might have bailed out just to see what the lease market would do. If the lease market had depressed as it did in Michigan, Chesapeake may well have sent their other shell company Crystal lake in to sweep up the pieces.
I posted here about 8 months ago, regarding the Canceled Permits within Slope County, but I think it must have been victim to when this website had a hiccup, as I can’t find the post anymore. On the NDIC GIS Map you can see them at T134 R104, 105, and vicinity.
Anyhow, there are many canceled permits within a few Township/Range areas in Slope, and I wondered why. RW Kennedy had responded, that it may have been due to oil price drops, or that a company had pulled out or decided to drill in another area.
I was on NDIC the other night and was exploring further into what I could find on them. They were all from the Fall of 1997, and approximately 98% of them were from Chesapeake.
I knew Chesapeake had drilled in ND, prior to this recent return they’ve made. I have no way of knowing why they’d permitted that much, and didn’t pursue them, but it seems like their working strategy hasn’t changed a whole lot. They seem a bit OCD, going over the top, then backing out. Hence, fast-forward to 2011/2012 where they come in like gang busters to lease up all of Stark, Slope, Hettinger, Golden Valley and a few other areas, start drillings, and now back away.
Snues, I just posed the question about bonus amounts in Slope at yesterday’s auction to Bruce O. On milliondollarway. He has posted a response. Tom
RW and Tom, I think they have questionable spending habits, but I’m sure if you dove into all other oil companies you’d find similar facts. The markets in general tend to be more positive than past couple of years, but I don’t know if the oil industry really had the same issues as the rest of the economy did.
I just question what their full intentions were a year ago, with leasing up supposedly 320,000 acres, and only having 2 rigs for that amount of land. I’m sure the data from the half dozen wells they’ve drilled, gives them some worry, but pretty premature to decide that it’s not worth pursuing further wells. Even within the Bakken zone, I’ve seen some pretty poor IP’s that get reported. Whatever data they had from all the 1997 permits that ended up canceled in Slope County, must have some draw. If it was exploratory back then, they sure planned a lot of exploration.
I saw that post on Bruce O. Those companies from August 2011, for the auction listed as Classic Petroleum-aka Chesapeake and Pacer-aka Marathon Oil, must have had a hayday bidding. Perhaps a challenge to see who got what, or maybe they knew each other from other auctions in other states, but it was CRAZY to say the least, of the amount they bid. Yes, location is key for all lands, but I think their tactics on that day, had more to do with other reason. State WON that day. Marathon has dockets for 5 spacings in NE Slope county, for the end of February, so that’s a positive note.
In the meanwhile, we’re held captive until they make further decisions or moves. I hope when or if they decide to drill the acres my family has minerals in, they know what they’re doing, and they pay the royalties. Otherwise, we will happily lease to another company in 2016, and by then, the activity should have picked up in the southern counties.
Susan
Tom, I just pulled it up to see it again, and noticed that they also posted that they’d be drilling horizontal into the Three Forks Formation with each drilling.
I’m not sure what formation Chesapeake was targeting with their drillings, but rumored to be the Tyler Formation.
Snues, I am wondering where Marathon has permits in NE slope. We are in 135n 7 & 18 98w. Pacer leased part of 18 at the Aug. auction. I called them this morning to see if they had interest in our mineral rights and am waiting for a call back.
Tom,
It doesn’t look like these hit your acres, but I hope they get in touch with you to lease what you have, especially since they leased part of 18 in August.
Here is what will be on the dockets this month.
Case #16947 all five will be 1280 acre spacing.
T135- R99- S 3&10, 27&34, 30&31
T136- R98- S 15&22
T136- R99- S 29&32
Snues, Thanks for the info.
Tom and all. I have rights in 135n, section 22, 98w which seems to me is close to you. I have a lease with Exterra (whoever they really are) and the same thing occurred with the person next to me. They told them they weren’t interested but yet they had leased everthing around them. I’m wodering with this horizontal drilling… what happens when they drill under property (or rights) owned by someone else. I’m out in Washington and haven’t yet found a good map of slope county and there is a lot I don’t understand about this game. Does 1280 acre spacing mean they can only drill that far horizontally? Any help is appreciated.
Seeking your thoughts. I recently learned that at the Aug. 2011 auction, Pacer bought 40 net acres in the same section we own rights. Called them thinking they might be interested in our acres as well. Got a call this morning and learned they are not interested. Bruce O. on milliondollarway has suggested it is all about location, location, location/timing, timing, timing. I wounder if this is the case here or is this just the game? (135n section18, 98w)
Mr. Varah, the operators are supposed to keep it within the lines but there are exceptions such as offsite drilling, where the wellhead is in a spacing that the well isn’t supposed to be producing and they supposedly do not perforate the wellbore casing in the spacing they are not supposed to be producing, but only the wellbore in the spacing they are supposed to be producing. There are other exceptions available to get around setback rules, so I won’t go into those. But generally the operator is supposed to keep it between the lines.
I should also have mentioned the usual reason for offsite drilling is either to use a multi pad, or the spacing they want to drill may be too rough at ground level to provide a suitable site for a pad. Please forgive me for leaving this out, I’m cooking and I was rushed!
I meant Bruce O. not Steve O. LOL
Sorry Bruce.
This morning on Steve O. blog, I found the link to Chesapeake update for those of you with leases accepted and assigned to Chesapeake, there still might be drilling on your minerals. I did notice the one rig they recently had in Golden Valley County, hasn’t been listed as a MIRU anywhere else in ND on the active rig list. They might have moved it to Wyoming, which leaves Chesapeake with only one active rig in ND.
Bob Brackett - Sanford C. Bernstein & Co., LLC., Research Division
Could you give us an update on the Williston Basin? You’ve deemphasized it a bit. Are you doing more science there? Are you more positive, more negative?
Aubrey K. McClendon
Bob, yes, we drilled a couple of wells up there and not crazy about what we found to date, so kind of recalibrating there. We have just under 0.5 million acres kind of south of Dickinson and really to the Three Forks idea for us. And I suspect the western part of our acreage, which is kind of abuts where Whiting is operating, will probably work out fine. We drilled our initial wells more towards the south than the east. So disappointed to date in what we’ve seen in the Bakken, but have a huge acreage position there. We didn’t spend a whole lot of money on it, so not too worried about that. And really, just moving our rigs over to the western side of the play and kind of cozy up a little bit more to what Whiting is doing there.
Called Marathon back today to get a better idea of what they are planning for the mineral rights they leased at the Aug. auction. I was told they intend to do further geologic study(Tyler formation) before they lease more acres. Got the sense that they expect to find the area favorable for further exploration & that interest in leasing will increase. Not clear on the timeline.
Does anyone know of any new interests in Slope Co. ND–John C Gross, SD