Got a lease offer today from a landman representing Devon Energy. Proposing to drill a Mississippi horizontal test well in Sec 4-20N-01E in Noble County. They're looking at 9500'. Their offer is for $350/ac and 1/8th (we'd never take an 8th...what are they thinking?) or $300/ac and 3/16th. Anyone else hearing from them?
Joan,
Sounds to cheap to me. And forget the 1/8. Lots of people are getting 1/5. Red Fork is doing a lot of drilling in that area. I think I would give them a call and see if they are interested.
I agree, Virginia. I don't think we've taken 1/8 for over 25 years! I'll check with Red Fork. Thanks for the tip!
Virginia Pflum said:
Joan,
Sounds to cheap to me. And forget the 1/8. Lots of people are getting 1/5. Red Fork is doing a lot of drilling in that area. I think I would give them a call and see if they are interested.
We got the exact same letter today, but for section 9-20n-1e (right below you). They are asking us to select one of the two lease offers you mentioned, or participate in the test well. Can anyone explain what they are asking for? Is this a force pooling letter?
It's a lease offer with an option to participate as a Working Interest owner. I think I'll let this one cook a little while...see what others start getting. It is not a force pool...not yet.
Adam Barlau said:
We got the exact same letter today, but for section 9-20n-1e (right below you). They are asking us to select one of the two lease offers you mentioned, or participate in the test well. Can anyone explain what they are asking for? Is this a force pooling letter?
Devon is filing the first paper work ( spacing) for a well in 4 and 9 but have not filed for a pooling yet . The letter is a well proposal which is to flush the holdouts out before they file for a pooling . The pooling is nothing to fear , in some way it better then some leases.
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We also received this exact offer from a land man representing DEVON
$300 + 3/16 Royalties
My offer also says I must elect force pooling if I participate with my interest by paying my proportionate share of the well costs--I don't really care about this as I wouldn't elect this, but I just thought it was interesting.
9500' horizontal test well in section 24-21N-01E
What I want to know is does anyone have even the slightest clue what can be expected from well like this?
100 b/d?
1000 b/d?
I just want an order of magnitude idea. Others are also offering $1800/ net mineral acre to buy these rights in this area.
Jake, you could reverse engineer what you can expect from the offers. It seems the buyer intends to make his money back in 3 years if he bought your interest and then leased it himself. There is always the caveat that the buyer could be mistaken, the well could be a flop or it could simply take longer to make his money back. It isn't that hard for a horizontal well to pay over $500 a year per acre at 3/16 for the first few years. $300 bonus plus an average of $500 royalty per year for 3 years. You may even get a better election in the pooling, either $300 and 20% or 3/16 and more than $300 per acre bonus. Good luck, whatever you decide.
Jake said:
We also received this exact offer from a land man representing DEVON
$300 + 3/16 Royalties
My offer also says I must elect force pooling if I participate with my interest by paying my proportionate share of the well costs--I don't really care about this as I wouldn't elect this, but I just thought it was interesting.
9500' horizontal test well in section 24-21N-01E
What I want to know is does anyone have even the slightest clue what can be expected from well like this?
100 b/d?
1000 b/d?
I just want an order of magnitude idea. Others are also offering $1800/ net mineral acre to buy these rights in this area.
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There are poolings pending in sections 2,3,4,5,8,9,11,12,31,32,33. There is a well that from 6/9/12 to the end of 12/12 did 9,074 BO in 24. In 22 from 11/23/12 to the end of 12/12 one did 7,758 BO . IN 15 from 10/12 to the end of 12/12 it did 7,707 BO . In 16 from 11/12 to the end of 12/12 it did 4,331 BO.
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