Chesapeake is widely criticized in the industry for over extending on lease acreage. But is there really such a thing?
As long as mineral rights holders dominate over surface owners, why isn't in the best interest of every company to lease and hold as much mineral acreage as possible? Even in marginal plays...plays that are hot plays now were viewed as "long shots" as recently as 5 years ago.
Dave , I see nothing wrong with a company stockpiling leased acres. It would prevent competitors from drilling them, provide a pool of acres to drill in the near future and allow them to build a relationship with mineral owners in case the area hots up in the future. Sounds like good business, as long as you don’t do anything to earn a bad rep.
Dave:
I agree with Mr. Kennedy in that the practice of leasing numerous acreage (longshots) is a good practice if your company has the capital to do so. If these areas become "hot", your company has obtained acreage at a lower price and in the event of a complete sell out to another company, this additional acreage is an attractive feature.
Do you know why Chesapeake would offer a lease and then rescind it? I was offered a lease for a $300 an acre for 12 months. From investigating this, I heard this was a very low amount.
Dave, If you are only interested in obtaining lease bonuses, then yes thats fine. But if you are talking about a good area, why would you want a company to tie up your land and not drill it? Wouldnt you want someone to come lease your acreage that had intentions of drilling? You will most likely make more money on the royalties, not the bonus.
Chesapeake has out lease - we are a 2000 acre pooled area - 3 miles south of Asherton Texas, drilling going on all around us particularly on the Brisco Ranches. I am wondering if Chesapeake is staying on the large non pooled property right now and will get to the smaller pooled area towards the end of the lease period. Originally leased for 3 years, currently more than half way our original lease agreement.
Any thoughts on this?