People:
U S Energy Group, USEG, announced yesterday it sold an undivided 87.5% interest in its Daniels County acreage for $3.68 million. The sale is conditioned upon the execution of a mutually acceptable letter of sale and Purhase. This should (if my math is correct) value 100% of the 19,000 net ac at $221/ac. The purchaser will also commit to drill a vertical test well to a depth sufficient to core the Bakken and Three Forks on or before December 31, 2015. Maybe we're getting closer to something.
Do you know who the purchaser is??
Not yet--the deal is supposed to close June 12th. I guess we'll know then. I called and emailed a landman familiar with the acreage and left a message to call me. We'll see. If I learn anything new, I'll post.
Tim A. Schneider said:
Do you know who the purchaser is??
Thanks for posting this info. I'll be interested to learn whom the purchaser is.
Any idea where USEG's 19,000 acres are located? In other words, is it blocked up in a particular portion of the county? Thanks again.
I know part of it is in the Smoke Creek area south of Flaxville.R34, N50 if memory serves. I'll check when I get to the office in a couple hours. In a conversation with someone with the company last year, he said they chose the Montana area because the geology was similar to the acreage they had in North Dakota. If you go to Yahoo Finance and enter the symbol USEG you can find the message board. They have had some success in South Dakota.
Eastern MT said:
Thanks for posting this info. I'll be interested to learn whom the purchaser is.
Any idea where USEG's 19,000 acres are located? In other words, is it blocked up in a particular portion of the county? Thanks again.
At the office-- at least part of 34N 50E is included- I don't know where ALL of it is. A township is 23,000ac
My landman emailed and was unaware of the sale until I told him. I know USEG had been trying to acquire leases there since at least 2009. We leased with them in Sept of 2011. If I learn anything new, I'll post.
Seward Anderson said:
I know part of it is in the Smoke Creek area south of Flaxville.R34, N50 if memory serves. I'll check when I get to the office in a couple hours. In a conversation with someone with the company last year, he said they chose the Montana area because the geology was similar to the acreage they had in North Dakota. If you go to Yahoo Finance and enter the symbol USEG you can find the message board. They have had some success in South Dakota.
Eastern MT said:
Thanks for posting this info. I'll be interested to learn whom the purchaser is.
Any idea where USEG's 19,000 acres are located? In other words, is it blocked up in a particular portion of the county? Thanks again.
Thanks again.
For what it's worth the May BLM (federal) lease sale included some tracts in SW Sheridan County.
I believe the terms on federal mineral leases are still set at 10 years, 1/8th royalty. These are not within Daniels County, but they are just off the SE corner of Daniels.
33N 52E, 67 acres, $470 / ac
34N 52E, 40 acres, $600 / ac
34N 53E, 159 acres, $800 / ac
Got an email from my landman. He feels that we should see some motion (drilling permits, etc.)fairly quickly in that most of the leases were acquired in 2008 and 2009. Will keep me posted.
That is awesome....So is US Energy the driller? Wouldn't their 2008 and 2009 leases be expiring soon? I guess they would drill there first, but why have they had leases this long and not filed for a permit to drill?
They have land in Dakota, Eagle Ford, and California as well and have been active there. They are not a large company and I guess they felt a a J-V at this point would be their best option. Just my guess.
Ted Rothstein said:
That is awesome....So is US Energy the driller? Wouldn't their 2008 and 2009 leases be expiring soon? I guess they would drill there first, but why have they had leases this long and not filed for a permit to drill?
Again...I am back to the same thing on evidence that they will drill....Why have they been leasing since 2008 and 2009 and have not filed for a drilling permit? Is there a legitimate reason for them to have not filed for a drilling permit? I guess I'm just confused.
Speaking of drilling permits, what is the status on Shale's drilling permit and when will we find out if they have been approved? Is there a chance that the drilling permit Shale Exploration applied for will not be approved?
go to www.bogc.dnrc.mt.gov-activityletters/20120427.pdf Or call the office and they can tell you who is bonded in the state and who has permits and where. The deal is, it takes a while to acquire 19,000 ac in a compact , contiguous area especially when the leases could be 10-20-100 ac each. Some acreage was acquired as late as 2011.
At $8-10 milion per well it could cost $24-$60 million per drilling unit depending on the size of the unit. USEG sold at a profit and retained 1/8 interest. Joint ventures remove some of the risk--like a bookie laying off some heavy wagers on another bookie to prevent a catastrophic event.
The bookie language is scary, but I get your point. You probably know from my others posts, I am just looking for legitimacy. To me, filing for a drilling permit says everything and Shale just did that. I believe Shale is the only company leasing out there that has the backing and that is why I am going with them, more than likely. I know they probably read this stuff and I just want to say that doesn't mean I'm signing, Shale, I'm just leaning in your direction. The question for me remains who will drill my minerals quicker. I think filing for a drilling permit is a good sign, but I want to give these little guys who are leasing (U.S. Energy Group, Bakken Energy, LLC, Bakken Oil, Montana Lease Holdings) a chance because who knows, maybe they could pull it off. I think there are other small outfits I am not mentioning. You do sometimes want to root for the little guy, but at the end of the day, who has the backing, who is going to file for a drilling permit and who is going to drill my minerals?
Did you go to the website? Call the office. Do your Due Diligence
I leased a portion of my holdings to MLH but now have heard they are in litigation with Shale for some kind of breach.