You also may be interested to know that G3 is in the process of being bought out and/or merging with another company.
Debra, anyone can lease your minerals and participate in G3’s well. If it’s a well to be drilled soon, an outsider would have even greater interest, not having to wait 3 or 4 years with their money tied up for the well they invested in to be drilled. If you have family members with interests there you should all band together, even 20 acres at 20% royalty would be a noticeable loss to G3 if they saw it walking away. It wouldn’t take a fantastic well to produce $50,000 per acre. That would be $10,000 for you per acre, $7000 for the cost of the completed well per acre and $33,000 for G3 per acre. As greedy as oil companies are, if you collectively have 20 acres and they see $660,000 walking away, then $1500 per acre bonus might not sound so bad to them.
Great advice if I can get the other family members to be on board with me!! I am going to try and thank you all for your help. Now, how do I find who else is drilling in the area to negotiate with if I need to?
Charles:
Who is the other company buying or merging with G-3? This does not suprise me at all. As time goes on, some of these smaller operators running on “fumes” for capital will find avenues such as merging or selling to the larger companies with surplus capital at their disposal. If I am not mistaken, G-3 is a subsidiary of Geo Resouces.
Charles M -
The other company is Halcon Resources (symbol HK). G3 is a subsidiary of Geo Resources.
The two wells I referred to (22309 and 22310) are in confidential status until September 2012.
Debra:
Sometimes, the Eser.org website will list the current mineral lesees on leases. You would have to google Eser.org, put in your location and see if these are listed at the bottom of the page. They are listed on my minerals in T157N;R103 area.
Debra, there is a great resource for you called the NDRIN Recorders Network. The subscription costs $25 per month and it will allow you to search every lease in your area and who holds it. Start with your section , then the one spaced with you, then the sections surrounding your spacing anything 5 years old or newer, ect. You may very well find someone already has a minority interest in your spacing that they would like to enlarge. I did this the last time someone wanted to lease from me. The other interest did want to lease me and the bonus offer rose rapidly from $200 to $3,000 primarily because of the math of seeing 15.4 acres walk away. Don’t forget to cancel the NDRIN subscription after you find out what you want to know, so it doesn’t become a recurring charge. You could also ask them to send you an AFE as though you are considering participating and it could well list unleased interests/ other participants in the well. All you need is one and it’s a horse race.
Charles:
Congrats on your well. It was drilled as I stated earlier in the Section 6 & 7 spacing unit. Your next adventure is division orders.
Good news indeed! Now how and where do I learn about division orders??
Re Halcon Resources see http://www.bloomberg.com/news/2012-07-02/georesources-seen-returnin…
What is the bonus rate at this time for the area of: T157-R102W-S3? The well designated for that area is “confidential”. We have someone offering a 3 year 20% lease. I wanted to make sure the bonus is in accordance with what is being offered in that section. Thank you.
Debra, I think your area is being leased quite extensively by G3, there are wells already drilled in sections 1, 4, and 5 and I see a confidential dot/permit above your section 3 located on the south border of section 34-158-102 to drill your minerals from offsite, to drill sections 3 and 10 157-102 from a pad in section 34. Since G3 already has plans to drill your minerals, I wonder who you “heard” from that the area is not really being leased ? If it was from a landman you can just discount that totally, as they are using salesmanship on you. The wells production near you do not appear to be barn burners but look like good commercially feasable wells, profitable. There are 10 horizontal wells or more within 5 miles of section 3 and you are bracketed by the ones in 1,4 and 5. There is already a plan to drill your minerals and the permit drawn, Debra. Do you really think they are not leasing in your area ?
Ok, the Well name is Pasternak 1-3-10 in Williams Co. There is a “confidential” in the section above ours (158-102-34) which I assume will become a horizontal and run through our Section 3. G3 is the operator. The landman is representing G3 and only offering $500 an acre. Is this the best we can do bonus wise through the operator? 3 yr 20% .
Debra:
T158N;R102;Section 34 is spaced with T158N;R102;Section 27…I will guess that the horizontal leg will run North. G-3 is actively involved in this area around you so you should be able to negotiate firmly with them. Don’t sell yourself short with G-3 as they most likely need your minerals but want to get them for as little as possible. Again, they might not be willing to pay you the $2000/acre bonus but I would start at that amount. If nothing else, find out what other operators have minerals in your section and market to them.
r.w. has it right.
but if you are even tempted at leasing for $500ba and 20%, you should employ a mineral attorney to negotiate for you. It would be criminal in my mind to lease in Williams County for $500 an acre if a rig is rolling down the road towards your minerals…unless of course you can up the royalty percentage. I have found the operators to be pretty stubborn regarding increasing the royalty percentage.
If you do negotiate on your own, go for the stuff R.W. listed and also throw in a vertical Pugh clause. (they will most likely reject it out of hand but you throw everything including the kitchen sink when you start out because you won’t be able to add things later.)
uhhhh, how many acres are we talking about here? I am getting deja vu from another post like this from long ago.
Charles:
T157N;R102W;Section 6 is spaced with T157N;R102W;Section 7. This area would be the location of the well.
Mr. Anderson, you found out right here! Your well is the THOME 1-6-7H file # 22309 and it comes off the confidential list 8-17-2012. I found the informatin on the confidential well list at the NDIC. Keep your eyes peeled and watching the GIS Server Map found on the NDIC O&G home page. I’m glad if this helps.
Charles M & R.W. -
Thanks for all the information - I will look forward to the August release date
Andrew, I remember that one also, they wound up only having .16 acre if I recall and we then shifted to advising selling for up to $2,000 because it would be worth that much to the company in paperwork reduction alone over a period of 30 years.
I recall that Halcon was leasing in Slope county early last year but I haven’t heard a great deal about them since.
Daren, the same rig probably drilled both your wells and they can drill to total depth in about 30 days each so that would account for at least 30 days difference. When you think about it they also gained knowledge when they drilled the first well and they probably studied the logs from the first well to make the second one better if they could. They probably didn’t move the rig far to drill the second well but it doesn’t happen instantly. Rigs break down and have to be repaired and it can always add time to drilling a well. Also while all permits have confidential status the true confidential time doesn’t start until the operator asks for it and the operator may not have asked for it immediately. I’m sure there are some things I missed that could explain the time differential, the point is there are many reasons. Not a definitive answer but I hope this helps.