Getting an offer to lease. In 25-18-4. Would like to know what a fair lease price would be?
Here is what they were order to offer in poolings close to you.
Major financial institutions are predicting an increase to $75 in the price of oil by the end of 2015 and most believe it will go to $90 by 2017. We are experiencing a commonly occurring downturn in the price of oil and those of us who have been in the business for some time know it will not last. When the price of oil goes back up, lease offers will go up also.
Some operators have quit leasing except necessary to complete a project under way, and offers are off as much as 90%....$2500 became $250 ... I am not as optimistic as some. The Society of Petroleum Evaluation Engineers annual survey just came out. The consensus was $54.35 this year; $61.95 in 2016 and $66.69 in 2017. Nat Gas = $2.94, $3.25 in 2016 and $3.47 in 2017. My own prediction is that natural gas will recover much slower than oil prices and right now the big issue is the Chinese economy along with Europe. It does not really look good for the next few years.
If oil prices stay low for long, global inflation sets in and when inflation goes up, so does the price of commodities and oil is a commodity. OPEC is no longer in control of oil prices and the US Feds do not want inflation, so the old supply and demand is no longer the golden rule of oil prices. Now, we have to consider inflation and global recession. The EIA predicts a average of $60 in 2015, so the price of oil will have to rise at least $70 to average out this year. EIA predicts an average of $67 in 2016. Basically, all agree that oil is not going to go down in the next 2 years, how much it goes up is the question, but I'm not signing new leases until it goes up. http://www.eia.gov/forecasts/steo/
I would love to wait until prices go back up, but don’t you risk being pooled and then having to choose what they come up with ?
Whether you are pooled or not depends on the lessee. Find out who wants the lease and who is drilling/operating the wells closest to you. If it's a land service, ask who will be drilling and operating. You should be able to determine if they want the lease to drill and produce or to turn it for a tidy profit when oil prices go back up and drilling picks up again.
Pooling is not a bad thing, preferable in some cases. You are supposed to get offered the best price of the surrounding eight sections from the last year. Doesn't always happen, but it is close. There are benefits to pooling.