Burke County, ND - Oil & Gas Discussion archives


#81

All I have ever heard is don't do the 2 year extension, since things can change every day out there. I have also seen many leases this year that Continental has done in Burke County at 20%. Also 3/16 is also common. I was told that Burke County doesn't even register as a producing county-by the ND Oil Commision. I don't believe it. As production and technology improves on any of these wells that are drilled, things can change in Burke county.


#82

Mr. Davis, those are good acres in my opinion. The surrounding Madison wells I looked at were fair to very good, with the only fair being in the minority. You aren't going to get rich off 8 acres but in a 160 acre unit each acre is going to pay well. I believe Bart likes the cost to participate and the historic production. If your original offer will not increase considerably, I'd give Bart a call.


#83

Does anyone have any info on future drilling in Burke County? I have several wells with Petro Hunt and see they have reduced their number of wells currently drilling down to one and there are only two currently drilling in the county?


#84

Jim, the price of oil will go back up. Operators only need to drill enough to get the leases held by production.

The wells produce a great deal of their oil in the first year and decline becomes a major factor. It only makes sense to wait for the price of oil to rise before fully exploiting the lease. Every barrel sold for $70 a barrel is a barrel that will not be sold for $90 a barrel. There is a finite amount of oil and the price of oil when the well is new and producing it's best is a factor. This business takes patience on the order of years if not decades to make the most of what you have. I certainly don't want my property pumped dry at $60 a barrel when higher prices are not more than a year or two away at most in my estimation.


#85

Thanks for the input R.W. Still talking with Diamond, and am prepared to play give and take, but still have questions. They say they are going for the Madison, which seems to make sense from the maps I've found, but they balk at a vertical pugh clause at the offered $/acre. What's under the Madison that they might want, Bakken? Is there any advantage to the vertical pugh for the mineral owner today? When I first started getting involved, my uncle, Thornton Davis who was a petr. geologist in the Williston circa 1950s, had just died and his long time secretary told me to "always go for a vertical pugh" But I'm wondering with the new deeper drilling techniques if that isn't limiting potential lessee interest.


#86

some of this talk is going above my head but I hope as oyu talk more I'll understand more....... I am seeing some lease offers to the north of you Mr. Davis with clauses of depth limits: from the surface of the earth to the stratigraphic equivalent of the Lodgepole Formation as encountered in the Hess Corporation AV-Schwartz 163-93-0211H-1 well located in Lot 1 of section 2, T163N, R93W, Burke Co, ND at a measured depth of 6,291 ft TVD. Like I said I don't know what all this means but i have seen it repeated in multiple lease offers.


#87

I think asking for vertical Pugh does limit the audience in some cases, Andy. Back in conventional times, operators were targeting one zone (one vertical depth) only, so why give them your deep stuff too when they weren't gonna drill it? If you held on to it with a Pugh clause, you had the option to get it drilled by another operator. If you didn't use the Pugh, your deep stuff would be held by production on that lease for many years, doing nothing good for you.

Now, since an operator is planning to exploit multiple vertical benches (almost) simultaneously, it doesn't make sense to use the vertical Pugh.

However, if you reasonably believe you've got multiple stacked benches of productive oil zones on your land, I think one could reasonably factor that into an expected lease bonus. It all adds up, when it's there.

I think you'd have to know intimate details about the production adjacent to your acreage to do that.


#88

John, sell them as much as they will pay for, which I think is close to what Bart is saying.


#89

Thanks rw, Bart and BE. All good info. Looking things over a little more but the differential in $/acre with or without he vertical Pugh now makes sense.


#90

Just going to mention, in case you were not aware of it, a lot of easements are being and have been recorded in Burke County by the operators for laying pipes, to reduce and eliminate flaring there. If you live in Burke County and could comment , it would be interesting to everyone.


#91

I just learned that Cornerstone Natural Resources did not produce/sell any oil/gas from well 25995 in December. Anyone know the status of Cornerstone? What ramifications does non-production have on expired leases that have been held in production? I imagine many smaller operators are being squeezed now, if they're not adequately funded.


#92

Alan, I am curious about Corerstone also. We have a lease with them and I assume now they will not be drilling. What area is this well?


#93

Scott - the well is located here: SESW 24-161-91


#94

In reference to Alan Cook's question about the ramifications of a well not producing, I would suggest you check your lease and what reasons a well could be shut in and the lease still be saved for the lessee. What springs immediately to mind is lack of a market or the ability to move the product because we are full. Tank farms are filled in the high 80's percent range and they have to keep some space free or they wouldn't be able to move the oil around, different grades, as needed.


#95

Suddenly there are a lot of leases being filed in Burke County, after a long break in the goings on. I was contacted about a lease last year and then recently that was for $35 an acre, 5 years and 1/6 interest offered. I said no to that one, but I think a bunch of people went for it. HRC has been leasing there too, but I don't know the particulars. I'm waiting to see what happens with President Trump in office. Anyone else had this kind of an offer? I don't know about HRC -a subsidiary of Halcon.


#96

I had a very similar offer from Diamond Resources which I declined. They said that they wanted to lease all of it. They know it is 160 acres because they just did the appraisal for a probate. They sent a a bank draft for 10 acres ($350). I'm not biting on that one.


#97

I signed a lease in burke county. Petro Harvesteter appears to have interest in the area and are represented by Diamond Resources


#98

The cost of drilling a top notch well has plummeted. The AFE I receive these days are around 7.5 million dollars for 30 to 33 frack stages, about what it used to cost for an 18-20 frack stage well when things started slowing down. More frack stages means higher production and probably less oil left in the ground, which is important because you don't get a royalty on anything they leave down there. I look at my 2008 wells with 10 stage sand frack and wince, at least until I recall that they produce so little oil that one day someone will drill a real well to drain those same acres. Maybe my grandkids will see it. Too bad the poor wells wasted the gas pressure.


#99

Does anyone know the current lease terms Petro Harvestor is offering in the area of T163-R91?


#100

Interesting to see the latest lease auction prices for Burke County, Cottonwood area. $400-900 an acre. Of course it is still for 5 years and 1/6 royalty. I'm posting this in case you did not see it...