I have some open acres. Who all is leasing in the Garber area? Any idea on current bonus payments? Thanks
section, township & range ?
1-22n-4w
Garfield Co. records are not online so I can not look up who is leasing. I did look up some info. on OCC web site. Not much going on in 22n-4w at this time . There is some filings and wells in 23n-4w & 22n-3w. There is a well in 2-23n-4w that tested at 140 BOD & 275 MCF of gas. In the pooling for this well they were ordered to pay $700 for 3/16th. in the pooling for 10 they were ordered to offer $950 for 3/16th or 700 and 1/5th, no well info yet. In 22 they have a well that tested 128 BOD & 715 MCF . That was one of the first Horiz. wells in that townships and they only had to offer $125 for 3/16th. I'll be back with some info on 22n-3w.
In 22n-3w they have filed for poolings in sections 2,3,10,21,28,35, and permits for drilling on 2 & 3 . In 2 they were ordered to pay $600 for 3/16th, in 10 it was 600 for 3/16th or 500 for 1/5th. In 21 it was only 200 for 3/16th 100 for 1/5th.
Ed,
You may want to try Mesa Energy in Dallas. They are getting ready to do some drilling in N. Garfield. Not sure how much they have leased or drilled yet.
We spoke to somebody on the phone today. When we said we wanted 20% royalty he said thanks and hung up.
Did he make you an offer to start ?
Ed,
It's hard to get 20% when everyone around you are taking 3/16. Usually it works like this.
You want let's say, #1, ($500 and 3/16) #2, you want ($300 and 20%), so the oil company figures out what is going to be best for them. It's an "either" - "or" thing.
If they are leasing to resell or trade, then they want the 3/16 or less only, as a 20% lease is harder to sell. If the wells in the area are all coming in at 800 bbd, they may need your property and be willing to pay more if they plan on pooling. Otherwise, OCC will decide what they pay and what you get.
If wells are only making 50 bbd in your area, then OCC may say it's only worth $200 with 3/16 if they pool you.
There isn't anything cut and dry in oil business.
I found where they paid $500 for 1/5 in 10-22n-3w and $600 for 3/16 . I'll look some more when I get back from the p.o.
Ron - he never made an offer.
Virginia - 20% is becoming much more common. We've gotten several 20% offers elsewhere and they didn't bat an eye.
I found a pooling where they were ordered to offer $950 for 3/16th or 700 for 1/5th in 9-23n-4w on 8/5/12. There was a well in 2 that tested 140 BOD and 275 MCF of gas. I think it will pay to take you time but I am still looking.
The well in 3 (a mile closer to 9) tested 1,021 BOD and 1,327MCF.
3 what 23n-4w ?
That is unreal that would pay for the drilling in less then 6 months.
Yes, 3-23N-4W. Probably why section 9 was given such a high bonus and royalty.
I just joined the forum primarily because I saw a need to disseminate some reality into the discussion. The well you mention above (Plymouth-Sebranek 1-3H) recorded first sales November 2011. Through August 2012 the well has sold 3661 BO and 3,300 Mcfg, averaging 23 BOPD the last 2-months. There is tremendous hyperbole associated with this area and IP's are VERY unreliable and not typically indicative of a wells near-term performance, much less long-term. For perspective, assuming $950 per acre on a 640 ac horizontal unit (some are 320's), acreage costs would approximate $600,000. Drilling and completion costs are also quite variable but $4,000,000 would be a good ballpark figure. Given these costs and assuming a net revenue of 81.25% this well would need to sell over $5,500,000 in products to payout. There are also associated lifting costs, but for purposes of this example we'll ignore them. If we use the $90.00 oil and $3.00 gas, the well has grossed $339,000, or net to the working interest of $275,000 before gross production taxes (and operating expenses). The bottom line: This well will NEVER payout. I pose these facts because I see this activity on a widespread basis as a flash-in-the-pan. There will be areas which are economically viable, but the vast majority of the "play" is unsustainable. Acreage prices reflected herein are equally unsustainable, so a wait-and-see attitude isn't always a wise choice. I think the OCC information disclosed is informative but broad strokes in terms of extrapolating lease bonus values should be considered wisely and as such. I would like to chime in periodically unless the forum would prefer nothing but roses.
Douglas,
Glad you pointed this out. I think some of the oil companies are trying to get big investors by using the first test. I'm sure some of these wells are doing good, but on avg. if you look at the oil records that are sold, they aren't standing up to the big numbers.
Thanks for pointing this out.
Virginia
Douglas Good to know . In that case it looks like some one is going to lose there shirt because they have four more wells going around 3 in 23n-4w. What would you suggest a person do ?
Take the money and run! These are unrealistic, short-term opportunities. At some point in the not too distant future reality will prevail and it'll be over.