Conoco Goes After it

Arapahoe County BlM CO Big Lease means Anadarko hit a Big Number in 4S-64W (west side) To pay $6,600 per acre and give 20% bonus is almost ridiculous, unless you know their is Oil and Gas below and A lot of it. :)

Thanks for the info. Jason! That data from Anadarko is now confidential until 5/29/2012. These numbers don't surpise me. I would think some seismic was done early part of 2010 with some good results. Oil company's zeroed in on the sweet areas. Now those sweet areas have become much larger. Geskinetics is starting to conduct 3D seismic testing for a very large portion of Arapahoe as we speak, at a cost of over $40,000 per acre. We are talking entire townships being tested.

From what I understand:

Big Boys are in town with deep pockets

Bonus payments of $6,600 per mineral acre

20% royalty

Min $40,000 per mineral acre seismic testing

Arapahoe County voting in favor of development of resourses

Should be interesting ride

Confidential publicly unless, you know folks at Anadarko :) Fee based mineral rights owners will not get such large acreage bonuses but might get royalty numbers close to 20% after so more Niobrara proof. Interesting how all the numbers of estimates are proving on the low side for Colorado. For example the Jake Well in Weld was supposed to produce 250,000 barrels over it's well life (30 years or more) but to date they have already pulled out 160 barrels, LOL then 2 sections to it's east the same operator completed a Horizontal and hit a bigger number then "Jake". As the Drilling moves further south I am very excited for the people in Arapahoe county and love that the Goverment will allow the State to do it's job. Elbert sadly we wait :(

Hi Jason. My name is Floyd Holmes (currently living in Colorado Springs) and I have mineral rights in the following area: Township 4 South; Range 60 West; 6th Principal Meridian, Section 22: SW1/4SE1/4, E1/2SE1/4, SE1/4NE1/4. However, I only own 13 net acres. I do have the deed for the mineral rights but not surface rights. I am interested in leasing my rights to a company that is fair and will treat me as such. From your words it appears that Elbert county is not advancing at the same pace as Arapahoe. I have seen a posting about Conoco and the bonuses they are supposedly paying, together with 2 year leases with 4 year options. Any info you might have would be appreciated. Many Thanks, Floyd

Jake Well was the benchmark for the DJ Basin play. You are exactly right about how interesting the numbers are

Jake produced 50K barrels the first 3 months of production in 2009 and has declined drastically. The numbers show from Oct 2009-Nov 2011 monthly production ranged from 20K to 3.5K. The average production of Jake for the first 25 months is 194 blpd. (Not Bakken numbers) From what little I know, the numbers of a average commerical well (In general) should range between 250-300 blpd. We can expect all H-wells to decline, some slowly while others drastically. The Niobrara play is very young in Arapahoe & Elbert Co. with lots to learn.There maybe some advantage of waiting until a lot more is know about the DJ Basin. Like you said "No pudding, no proof"

Does anyone have information on the Lowery Range lease? Is there lawsuits pending?

Floyd I would love to talk to you and help you with your acreage, your doing it right and using caution and research. Please give me a call 303-995-0826 and I will tell you all I know. Michael good post the Niobrarra Shale seems to have a tremendous amount of oil and they are working on getting better production and less decline rates out of the Horizontals. The Niobrarra is a thinner shale unlike some areas of the Bakken that are hundreds of feet thick. We seem to have A, B and C Chalks and some operators are even going 2 miles long! The Well near Jake came in stronger and seems to be sustaining better then Jake. But 160,000 Barrels in three years is a huge money maker in anyones book especially when the operator is at 12.5% royalty payout. Not sure about Lawsuits but with State nominations and the amount of already approved acreage the big boys have it seems like they are tieing up more acreage at a heavy price. Maybe the Niobrara south of Weld is predicating better then Grover area? I will ask some landman I know and see what i can find out.

The unfortunate news is that Anadarko's well in the bombing range is not good. They did have trouble drilling the well, but the initial production rates of the well are less than economic.

Keep in mind Michelle the Niobrara is a chalk and the operators are still developing it, also there is so many stages of completion involved nobody knows precisely what has been performed to date. I will tell you the Gas reports of 1300 BTU gas and guess what it's wet so that means big $$$$ We have a well in Texas producing NGL's and its over 40% of our revenues.