I have a 3 year lease with Samson Oil in Burke County. They originally promised to explore drilling right away. We are 2 years into it and still get the same response that they are waiting for results on their other rigs recently drilled. Anyone else having luck with Samson? Should we just lease with a new company if the least expires?
Scott,
I have found Samson to be a very good exploration company. It has been in business for a long tome through the lean times and the good. It will continue to stay in business and in the forefront of onshore exploration.
Samson has a lot of undrilled acreage in the area and as good business people must assess the risks they have taken in new drilling and completion techniques before committing large sums of money to blindly drill ahead.
Exploration companies see the undrilled leases as raw material inventory needed to grow their production and thereby perpetuate the company. Currently there is a transportation bottleneck from ND to the refineries that will materially effect the internal rate of return of the exploration companies if they drill up too many reserves.
Except as voters, there isn't much we as individuals can do to solve the transportation problem. The exploration companies are dong everything they can to move what they are producing at acceptable prices. ONe company is building large rail facility.
I believe you are in a good position to get a favorable lease to you after your expires. Try to work it out with Samson in a way that meets their needs as well as protecting your future income. You could do a lot worse than Samson in my opinion. Just make certain you are working with an operator and not a speculator.
I have no connection to Samson but in the management of and owner of minerals in areas where they are active, I naturally follow its drilling activities.
My verbal experience was not as pleasant as yours Mr. Hutchinson, with Samson! Interesting Mr. Hutchinson, that you suggest to Mr. Losee that he "try and work it out with Samson in a way that meets their needs as well as protecting your future income." Slip of tongue? Maybe you should've pointed out the importance of protecting his rights above providing for the benefit of Samson, first? As I said, maybe your fingers just got crossed up with your thoughts!
Gary L. Hutchinson said:
Scott,
I have found Samson to be a very good exploration company. It has been in business for a long tome through the lean times and the good. It will continue to stay in business and in the forefront of onshore exploration.
Samson has a lot of undrilled acreage in the area and as good business people must assess the risks they have taken in new drilling and completion techniques before committing large sums of money to blindly drill ahead.
Exploration companies see the undrilled leases as raw material inventory needed to grow their production and thereby perpetuate the company. Currently there is a transportation bottleneck from ND to the refineries that will materially effect the internal rate of return of the exploration companies if they drill up too many reserves.
Except as voters, there isn't much we as individuals can do to solve the transportation problem. The exploration companies are dong everything they can to move what they are producing at acceptable prices. ONe company is building large rail facility.
I believe you are in a good position to get a favorable lease to you after your expires. Try to work it out with Samson in a way that meets their needs as well as protecting your future income. You could do a lot worse than Samson in my opinion. Just make certain you are working with an operator and not a speculator.
I have no connection to Samson but in the management of and owner of minerals in areas where they are active, I naturally follow its drilling activities.
Gary L. Hutchinson
Minerals Management
Mike,
With over 35 years of doing mineral deals as CEO, consultant, and mineral owner, I have learned that no mineral deal is successful that isn't fair to both sides. That takes an understanding of both sides needs at a minimum. Of course the mineral owner must demand terms that protect him in the event of a successful identification of the minerals. Likewise the operator taking the risk must be able to reap the rewards if his geologist are correct about the identification of the minerals. Identification and Development of minerals is the creation of wealth not the art of getting the upper hand at the negotiating table. Gary Hutchinson
Thank you for the advice. I don't think anyone is giving or trying to mislead me. I appreciate the help. I guess at this point I am at the mercy of Samson either way until the lease expires.