Rundle #2 well is now in drilling mode. The rig moved over with spud date as of 10-28-2013.
I also read that southwest ND got another 1/2 foot of snow yesterday. I hope this winter doesn’t slow up progress for the drilling.
FER, A year ago Marathon was offering 250.00 per acre. They are now drilling which suggests they have not become any less hopeful than they were paying 250.00. I suspect they are trying to get some last minute cheap leases. Tom
Welcome FER, that offer from Marathon doesn’t sound good. If you only have a few net mineral acres, that might be all you might get for this point in time. If you hold a good number of them, I’d hold tight and wait for a better offer. Also, waiting to see what these wells produce to the southeast of your mineral area, might get better results, but could also go the other way. I’d guess within 2-3 years, the drilling in Slope will be quite active and leases would go for more at that time.
Susan,
It seems I have some rights inside of the spacing unit that have been leased to Marathon Oil back in 2010. Does that mean that they “could possibly” drill there? I am confused on the drilling/spacing sections. We have shares in 136 98 22,26,27 and 136 99 34 in slope. the 136 98 22 is inside a highlighted section after doing the drilling/spacing section like the one you showed for Gwen. I kind of lost interest in the possibility of a well when everything slowed way down in 2011. I actually thought that someone from Marathon would keep us in the loop of activity, is this normal to have to monitor like this?
Thanks for the great information. I appreciate it.
Justin,
I have heard of many people that sign leases and not monitor if there is even a permit, especially in an area such as Slope county that hasn’t had much of any activity. I know of two people that didn’t know anything, until a division order to sign, showed up in their mail. The oil company will tell you limited things if you called them, otherwise, they don’t call the mineral owner unless it’s also the surface owner, because they probably need to get things settled with them, before showing up on their land.
How exciting for you!! to see this highlighted spacing section. I was out of town the past 34 hours and last night in the motel, I was reading thru stuff and found some interesting data I hadn’t known about. I copy and pasted it to save it for another day to really study it. It was a docket item from I think Feb 2011 maybe even 2010 or 2012 (duh, cobweb brain here) and it was Marathon Oil to get spacings for Slope County. At the time, I really hadn’t known about the dockets and didn’t follow them. Also, when I did learn a few things, I basically just studied Chesapeake, as it appeared they’d be the ones drilling out Slope.
Whats odd, is of those spacings, I never saw a permit for Marathon appear in Slope. Why they now chose some new spacings, and are actually drilling them, is still good news. Perhaps they’ll stay in Slope with at least one rig and continue to find the boundaries to the oil they are pursuing; such as Whiting is doing over in Golden Valley County.
Something new to the mix this year, Whiting/Empire Oil has been actively pursuing leases in Slope, so I am really hoping that either Marathon or Whiting buys out what Chesapeake holds in Slope leases.
Good Luck.
Susan
I remember when everyone was chasing our lease in late 2010 and early 2011. We had Eagle oil and gas and Blanca Peak Energy that started everything. Then Marathon came in a little later. I did a bunch of research and found out about Blanca being a front for Chesapeake. We actually took a cheaper deal with Marathon because of their reputation. Seems to have worked out since the bank draft went through in 2011. I wonder if Marathon would buy out Chesapeake if Chesapeake put more $ per acre than Marathon did back then, and a whole lot more money per acre than Marathon seems to be offering now.
Hi Justin,
I dug out the older data about spacings I spoke of, below is the copy and paste of it.
As to the chase of 2011, it did get crazy quick. I think it was the Aug 2011 State Auction, where Marathon and Chesapeake were bidding against each other , and the parcels went for outrageous amounts. I’m sure both companies have regrets to a certain point.
I’m guessing Chesapeake has had offers for the ND acreage, but none willing to pay the asking price. They basically have less than 3 years left, on the 5 yr terms they were signing everyone on.
NDIC Docket for Tuesday, February 28, 2012
Case No. 16947: Application of Marathon Oil Co. for an order creating five 1280-acre drilling units consisting of Sections 3 and 10; Sections 27 and 34; and Sections 30 and 31, T.135N., R.99W.; Sections 15 and 22, T.136N., R.98W.; and Sections 29 and 32, T.136N., R.99W.; all in Slope County, ND, and allowing a horizontal well to be drilled in the Three Forks Formation in each such drilling, and such other relief as is appropriate.
Todays State auction was lackluster at best. FYI Pacer Energy leases for Marathon Oil, I’m unsure about the other bidders companies.
134/99/9 = $90 Pacer Energy
134/100/16 = $110 Pacer Energy
134/100/20 = $140 Pacer Energy
134/100/23 = $140 Wildcat Oil & Gas
134/100/25 = $70 Pacer Energy
134/100/26 = $30 Pacer Energy
134/100/27 = $30 Pacer Energy
134/100/29 = $1 Pacer Energy
134/100/36 = $3 Pacer Energy
135/100/6 = $140 Irish Oil & Gas
135/102/34 NE4 = $115 Wildcat Oil & Gas
135/102/34 NW4, S2 = $2 Northern Energy Corporation
Hi all, I’m new to the group. I own mineral rights in T 133 N, R 104 W and was contacted a few days ago by Empire Oil with a lease offer. Anyone else hear from these folks? Deb
Two options: 1.) One 4-year term with an optional 2-years at $100/NMA plus 15% royalty 2.) One 3-year term at $100/NMA with two optional 3-year terms at $100/NMA and $150/NMA, respectively, plus 15% royalty. I’m sure you’re right about the lease being worth much more if someone goes in and drills a good well, but realistically, is Slope County likely to be a good producer?
Deb, if you each have an undivided interest in the acres, you can each negotiate your own terms and lease separately.
The terms seem to be getting slightly better. They were offering $50 and 12.5% three years ago. That alone would be reason enough for me to wait to see what terms become in 3 more years.
Long leases and lengthy or consecutive options seem in my opinion to be counter to the purpose of leasing. Is not the purpose of leasing to get a well and production and not hen scratch lease bonuses? I can also tell you that Empire is not drilling and operating wells, they may participate in them but they do not initiate them. Empire wants to speculate with your acres. I sometimes like to point out that you can speculate with your acres yourself. I usually tell that to people looking at anywhere from $7-$10 per acre per year of lease but I think it holds up when talking about $30 per acre per year when the royalty is so low and they will charge you for everything under the sun.
Another consideration is you don’t want to have the first well on the block. I have 4 wells from 2007 to 2008 in a great area and they produce poorly. Wells drilled in 2011 and up in the same area produce twice the oil in half the time. I wish I had the option to let someone else be the guinea pig. If you are leased, you aren’t a consideration anymore.
Hi Deb, you are in the area that Chesapeak permitted for the Red River formation in the late 90’s. I have heard of Empire leasing in that area, and their leases have been characterized by low bonus, low royalty, long term, and long options to extend for little or no more bonus than the primary term. Empire is speculating and will not drill a well.
I would not lease for the low terms I have heard unless I had alot of acres and or needed the money badly. If someone finally gets in there and drills a good well in the next ten years the value of your lease could be 5X to 10X what Empire is offering now. It can’t hurt to listen to the specifics of their offer though. If you don’t mind, please tell what you are offered just in case the standard offer of last year has changed, you might help someone else.
Deb, the Red River under you would be the same Red River that extends into and is produced in Montana, it can be horizontally drilled and could rival Bakken wells. You should look at the GIS server map, Chesapeake had a huge number of permits which expired in 1997. Empire oil also thinks the prospects are good enough to bet their own money.
I have been hearing of lowball lease offers in this area for three years now. People keep coming back with offers. It doesn’t mean there is anything down there but some people think there is or they wouldn’t keep making offers.
I have told other people that if they can get a short term and they have a large number of net acres, say 100 or so, they have a vested interest in keeping it leased for significant sums of money. If you have 5-10 net acres, you may be better off waiting to get the absolute best price and royalty.
Another thing is the terms of these leases are going to be ugly. I don’t need to look at them to know that they have the mineral owner paying for post production costs. Look at 15% royalty minus 11.5% production and severance taxes, minus state income taxes, federal tax should be a wash as long as the Fed Gov does not cut the depletion credit. 15% does not really mean 15%, it could be around 10% effectively, maybe a whole lot less.
You also need a lawyer to look over your lease and make some corrections for your own safety, the bonus probably will not even cover this if you have only 10 net acres, but if you don’t do it they will have you paying for everything under the sun and then may sell to an affiliate for half price and you will have no say whatsoever if you don’t have protective clauses in the lease.
Of course they will not accept these changes to the lease, so you are stuck anyway. If you are in a position where you have to sign the lease unaltered (badly need the money), I would look upon it as selling my mineral acres for two lease bonuses.
Looking at the current active drill rig list, the show that the H & P259(currently in Slope county), is listing its next location as Lucille USA 14-10H. This appears to be well outside of Slope county, at 146N, 92W, section 16.
Anybody hearing anything regarding the 2wells drilled in Slope. I suspected if they had success, they would be staying in the area.
Ok, Since no one has mentioned that #26233 Marathon oil company Rundle trust 11-29th NWNW 29-136n-99w, slope company confidential well plugged or producing in the daily report a few days ago is bad news?
Plugged or producing is just their way of saying they are not saying. Since wells usually aren’t plugged right away, usually not before they absolutely have to, it usually means producing. A hole has value, salt water disposal or something else so they are not usually plugged right away. There are alot of TA temporary abandoned wells so they don’t have to plug them.
I am curious about the Rundle Trust wells as well. We have minerals a few miles from there and our lease is very near the 2 year renewal option time.
I have been talking with a new member who lives nearby and is having problems posting on this forum. Here is what he said with this pic he took:wella.jpg here is picture of Powell on 2/17 workers on site not producing hope you can magnify picture to see progress Robert
sat4.jpgsat3.jpgsat2.jpgsat%201.jpgjust came from rundle and powell site , try to add pictures , rundle has large frac water tank filled ,powell is not producing , waiting for frac?? any comments?? Robert 2/22 /2014
