Somebody is going to lose their shirt they have drilled or filed paper work to drill wells in 26 sections in 24n-4w.
Douglas Take $ 950 or what ? There are 21 wells drilled or drilling in 24n-4w . What are they looking at to do that ? $ 50,000,000 + ? You would think they would have something to go on .
Douglas - where are you getting your historical production numbers? Thanks
Good intelligence and commercial sources. Listen, this stuff generally hasn't been leased for 20-30 years. Anything immediately preceding this play was $25-50/acre. This should be recognized for what it is (and isn't): A short-term opportunity. I've never advocated force poolings, always thought a good-faith, negotiated lease was best. Waiting on a pooling is a risk as there is no certainty that your acreage will be pooled. $950/ac is unreal. If you are or know any old timers in the area, ask them the last time they were offered anything close to that. Soon enough economic boundaries are going to be defined. If you're in a "sweet spot," that's great and values will hold. If not, it'll plummet and the party's over. Don't buy into the IP's (initial production rates) as I've yet to find one that's representative of short-term reality. There is an incredible amount of hype associated with this play for myriad reasons. Enjoy the windfall while it lasts.
They weren't using horizontal drilling for these formations in the past. That is what the Oil Co . hopes is that everyone will go by what went on in the past . Why would they spent $4,000,000 to drill these wells as fast as they can and drilling several per section in some places. There is nothing wrong with a lease or a pooling if it gets you what you want.
http://superioroilandgas.com/mississippi-limestone-emerging-as-top-flight-horizontal-liquids-play/
http://newsok.com/northern-oklahoma-oil-field-has-growing-potential/article/3732826
http://www.rigzone.com/news/oil_gas/a/118598/Osage_Updates_Ops_at_Nemaha_Ridge_Proj
http://www.ugcenter.com/US-Shales/New-Gulf-Resources-Ramp-Mississippian-Drilling-2013_104627
http://www.oerb.com/Default.aspx?tabid=242
Goggle it and see what you can find. It's your money so do you research.
I've been trying to find a good gov't source, but haven't found one yet. Oh well.
As far as stuff not being leased for the last 20-30 years, that is irrelevant. I have properties in other counties that hadn't been leased in a long time either, but now (within the last month) I'm getting $1k/acre with 20%. Not saying anybody should expect that everywhere within the prospect, but I wouldn't be so quick to poo-poo it either.
And of course, as you said, the majority of this thing could close up shop at any time. Or not. Some fairly sizable E&P's are sure moving in aggressively. They typically don't move in on a whim.