Converse County, WY - Oil & Gas DIscussion

Comment

Comment by John Linden on February 16, 2012 at 5:23pm

I don't know any of these companies.

In 2007 / early 2008, we received a couple of offers from small companies that were willing to pay a small amount of money on a lease  -- about $50.00 per acre. I turned those offers down. The companies were not much more than a phone number and a web page as near as I could tell.  About 18 months later, I got offers from firms representing Chesapeake which were much higher. We eventually negotiated a lease which was acceptable to Chesapeake and also to us.

My point is, I think there are some small companies who try to anticipate what will eventually be an active area for leasing by a larger oil company. These small companies try to acquire as many leases as they can at as low a price as possible. They then hold on to these leases until a larger oil company offers more money.  

If you want the money as soon as possible, these small companies might be a good alternative. If you are trying to get fair market price, you need to wait until a larger oil company has interest in the area where your minerals are located.

There is no "correct way" to do this. Everyone has different circumstances. But my observations are that we are seeing two different types of companies looking to lease minerals. The earliest offers come from small companies that are speculating. The later offers come from oil companies that are trying to tie up large plots of land with the intention of drilling in the area.  Will they drill is always the question? But as mineral owners we do have a choice of who we lease to so it pays to pay attention to the intentions of the companies that are trying to lease from us or buy our minerals. 

Now that we have leased, I have offers from companies trying to buy our minerals. I think this is speculation because there are no wells drilled close to us yet. So in my opinion, speculation is the first wave.

Good Luck!

John

Comment by Warren Alexander on February 16, 2012 at 2:35pm

Thank you Sir, I appreciate your help. How about a Company called Anderson Resourses from Salt Lake? I have received a lease proposal from them also.  Thank you very much Alex/

Comment by Eastern MT on February 16, 2012 at 8:20am

Mr. Alexander, I've not heard of "Scarlett Res.". Though it is not unusual for many unknown (or new start up) companies to lease acres in an area which is active. These "companies" may be only a single individual or an LLC which is speculating. They want to buy some leases, mark them up and/or carve out some royalty, then sell (assign) those leases to others for a profit.

 

There is nothing wrong with the practice. They are risking their investment (by buying your lease) in the hopes of a profit. You just need to make sure you receive your bonus payment up front before delivering a signed lease to them. Good Luck. 

Comment by Warren Alexander on February 16, 2012 at 2:28am

Have any of you ever heard of a company called Scarlett Resourses, from New Jersey?? My Sister and I have been approached by this company and no one seems to know anything about them.  We would appreciate any information you might have Thany You very Much

Comment by Warren Alexander on January 25, 2012 at 12:37am

Where have all of the Oil Bugs gone???

Comment by Kevin B. Koonce on January 5, 2012 at 12:02pm

http://www.reuters.com/article/2011/12/28/us-energy-giant-idUSTRE7B...

Comment by Ray A. von Proctor on August 11, 2011 at 6:54am

The state of Wyoming is thinking of going to 3/16 ths royalty rate which will establish a new base line for all of us.  Try to expressley forbid processing fees from being deducted from any production.

Comment by Eastern MT on August 9, 2011 at 12:38am

George, I don't know anything on the Unit you mention. Though I can provide you basic info on drilling permits. They're valid for one year. Typically several months pass before drilling begins, though it could be the following week. Sometimes drilling never begins after a permit is approved. So it's near impossible to make an educated guess, you just have to watch and wait.

Comment by George Shields on August 9, 2011 at 12:01am

Does anyone have an educated guess as to when drilling starts from the time of permit approval?  And is anyone aware of any drilling commencing in the South Hylton Ranch Deep Unit?  Thanks for the info!

Comment by Eastern MT on April 14, 2011 at 2:32pm

Fred what I've seen is Chesapeake actively leasing around Douglas, and also south / sw of Bill. As to sending them your terms; What they're saying is; If you asked for $25/$50 per acre they may lease you now (even though you're outside their area of focus). If you ask for $500 they'll just ignore it.

 

So I suspect patience is probably your best bet. There are two dozen drilling permits across 36N- 70W & 71W alone, and more across the general area. If they start drilling and hitting wells there, it is possible they may expand their area of interest towards you.

 

You're doing the right thing by "showing" your minerals. The timing is not quite right. None the less, send them a letter and ask for ($200?) with 3/16th. Expect they may counter with $50 and 15%. Then decide if you really want to strike a deal now. If you're anxious for funds I suspect they will lease them for cheap. Yet, if you wait and some of this acreage starts to produce you just might see lease rates of $200 to $500 across a larger area of Converse County.

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