Lynn County, TX -Oil & Gas Discussion

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Comment by Jerry Lobdill on May 16, 2012 at 8:26pm

Citizens Shale Advisors gave a presentation at the Electric Coop in Tahoka last week. If you haven't signed a lease yet you owe it to yourself to take a look at www.DontSignThatLeaseYet.com.

Comment by Paige Johnston on May 15, 2012 at 1:47am

Below are portions of a transcript that was pasted onto the Terry Co. Group, and Lynn Co. is mentioned. Discussion by Concho Resources CEO where they discuss their acreage acquisitions in Terry and Hockley counties.  This is another large oil co.  There is a lot of talk about the Wolfcamp and Cline shale formations. Here is a link to the article: 

http://seekingalpha.com/symbol/cxo 

Concho Resources' CEO Discusses Acquisition of Three Rivers Operating Co. (Transcript)

And then up to the north, we’re picking up a strategic piece of acreage in Terry Co. in and around that new development we have for Cline and Wolfcamp up in the northern part of Midland Basin. And then in the south, we get a very attractive block of acreage down in the Southern Midland Basin. This will greatly complement our effort to increase horizontal drilling in the Midland Basin.

Matt Hyde

I think we gave some insight into the northern Midland Basin potential with our announcement of our acreage position up there in Terry and Hockley. Genuinely, as you know, there has been a very little information out about that specific portion of the Midland Basin. Although, I can tell you, there are lots of people that are active up there including some fairly large operators at this point in time. Most of the public information out there is specific genuinely to the southern Midland Basin at this point in time, and then just recently, more over into the Eastern Shelf. But I can assure you, there is quite a bit of activity behind the scenes going on – on the northern portion of the Midland Basin, both with respect to the Wolfcamp and the Cline.

Sven Del Pozzo – IHS Herold

Looking at the last couple of deals we’ve just talked about, you’ve mentioned one in Terry County and in Lynn and then down in the bottom right hand corner Reeves and Pecos County. It seems like you’re buying stuff for cheaper that’s away from activity whether there might be greater uncertainty associated with the quality of the acreage that’s being acquired. So – and you mentioned also at least for this stuff at Terry County and Lynn County, the Wolfcamp and the Cline Shale, in the same Senate’s. I’m wondering if it’s generally true what I said that there is not as much drilling in those areas. Can we think about these plays being much more expensive than the way that we know them today based on current drilling and would you agree with that and does that mean there is more acreage out there to grab?

Tim Leach

Yes, I would agree with that, so would just about every one of my competitors. And the acreage grab, I mean, you rightly point out that a lot of things we’re doing, we’ve had a great amount of success in the northern part of the Delaware Basin and there has been some success over in the southern part of the Midland Basin. And the real question is, where can you find rocks that look like that in other parts of the Permian, and that’s what’s driving all this activity.

And so it is, you step out, the acreage is a less expensive than if I was buying a block of acreage right next to one of my really highly productive horizontal program, but it’s riskier. But at the Permian Basin with it stacked plays, it’s a level of risk, I think you can get comfortable with and that’s what is going on in our industry today. And we think that we’ve got some pretty good signs here in Concho and we’re pretty excited about the opportunities there in front of us.

 

Another good article on the Wolfcamp & Cline Shale.  

http://www.approachresources.com/approach/files/ab/ab8ea30d-8a05-4f...

Comment by M Klingman on April 25, 2012 at 7:12pm

I am getting my lease paperwork as I want it and will be ready to go over it with Coastal next week.  Is the going rate still $450 3 yrs, $500 option and 25%.  Has anyone heard any different?  Please share information. Thanks

Comment by Paige Johnston on April 20, 2012 at 4:20pm

Mother and I drove some of Lynn Co. on Monday. We came from Brownfield, and saw Shell's rig right on the north side of US 380, close to West Point. Word is they'd finished the vertical well there, set the cement casing, and are waiting for the horizontal rig...and are very secretive about their results. Good signs, I'd think!

We then headed south on 3112, then west on 2053. We have royalty on part of a section where 2053 turns south, and it's been leased, but we didn't see any activity there (no pad, no rig, etc.).

Turned around and went east on 2053, through O'Donnell, and all the way to 1054. Saw several new pads and action west and n/w of O'Donnell, and a new pad on the south side of 2053, in the first section east of 1054...but nothing on our tracts leased in that area by KEW - drats!

Came back to O'Donnell then headed back to Lubbock up US87. There's action on the new pad I saw in Aug. on 213, just west of US87, but we didn't go closer to look.

Frankly, I don't know what to look for, or what I'd be seeing (other than a new pad, a rig, or a pumpjack) - I wouldn't know the difference between a rig for a water well vs. an oil well...or a horizontal vs. a vertical rig. Maybe I can learn some of that at the NARO convention in San Antonio!

I still have some issues with the lease I was sent from Coastal (for Shell), so nothing's signed yet. Same offer as you mention. There are some new players making offers (to beat Shell's) in the northern part of Lynn Co., but we don't have any tracts there, so I don't know details.

Comment by Mary Lou Boggus on April 20, 2012 at 3:49pm

Hey Paige:  Have you leased yet?  Have you been back to Tahoka since we spoke and if so what is going on now.  Is $450 per acre bonus, 25% and $500 for the 2-year option still the going rate and has Shell drilled anything that is producing?

Comment by Robert Tilden on April 19, 2012 at 7:26pm

Hi Klingman. Yes, my attorney saw a couple of items in the Coastal proposal that he did not think were in my best interest.  They did offer $400 and 22% and option at $250.

Comment by M Klingman on April 19, 2012 at 3:08pm

The guy that I am talking to from Coastal is John Duffy from LA also.  He

gave me a lease to look over and my knowledgeable oil friend said that it needs to be gone over very carefully on each paragraph.  Coastal told me that the highest they would go was $450, 25% and a 1 and 1 option of $500.  (They started at $425 and 22% and I said no way!)  I was called this week by another leasing company that was gathering info and will be in Lynn County next week.   He does not work for Shell, or SWEPI, LP.   If all of us would just say what we are offered then we could negotiate much more comfortably.  These guys are not our friends--it is their job to get the best deal they can and we need to get the best deal we can!!!   Please share all information and offers.

Comment by Robert Tilden on April 18, 2012 at 3:01pm

Thank you for the insight Paige.  BTW, my attorney found a couple of clauses in the first lease proposal that was sent out by Coastal, and maybe what you mentioned was one of the problems he saw. Thanks again.

Comment by Paige Johnston on April 18, 2012 at 1:56pm

David Meaux is the landman for Coastal (Shell is their client) that I've been working with. I haven't heard from him in a few weeks, but I know he was working on the title research, and working with Cal (Huffaker) to get all  our leases completed. David's been in the business for 5-6 years, so isn't one of the new young kids.

Cal told me a few weeks ago that there is so much title work to be done for the 300,000+ acres that Shell's leasing that Coastal's top brass came to town to see what they could do to facilitate the title work, getting leases signed, etc., and were hiring additional people to speed along the title work. CAUTION - be sure to check your leases carefully. I found several mistakes (names, tract description) in the first lease Coastal sent to Cal for me to sign.

Comment by Robert Tilden on April 18, 2012 at 1:29pm

I have heard of Coastal Land Services, but not David Meaux. According to their web site they are based out of Louisiana, and with a last name of Meaux, that would seem to fit French Louisiana.  That said, Coastal sent me a lease proposal about a month ago and my attorney is reviewing the proposal.  I think my attorney e-mailed them last week, but I do not know if there has been a response from them yet.

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