Very interesting report. Thank you for sharing it. I wonder if some old leases allow EOG to use the produced gas cost free?
Rock Man, I do not have any stock in this company. In this kind of case do you think if things got back on track their stock will again have any value or is it shot in any case? Assuming the court approves the deal. Would the company have to come out of bankruptcy for that to happen? Can they operate under bankruptcy indefinitely?
Word is that the investors have basically agreed to the reorganization plan. So they will come out and start fresh. No guarantees of success, however. Halcon just announced a similar reorganization plan
Hello all:
Not much going on in our local area right now; but, across the state the land grabbing legal crooks haven't been slowed up one bit. Not sure there is much we can do about the land grabbing; but, every change we get we need to raise the issue about pipelines in particular and more importantly, "The Right of Eminent Domain"! We are seeing it front and center in Washington DC; but, it is everywhere there is a dollar to be squeezed out of the hard working, law abiding people.
Check out these two links: Be sure you take a good dose of aspirin before reading them or you might get sick.
GeoSouthern is thinking about drilling again as they permit a new Chalk well in
Fayette county on 6/20.
I sort of feel like this may be waking the dead. I have heard that Geosouthern leased some properties about 9 months ago around the LaGrange power plant area for a 3yr. lease and is now coming back with a 2 yr. option. Is this unusual? I think there may also be some bonus cash to give them a shot for first chance to lease after the total 5 yr. lease. I guess i have never heard of such a thing....somebody must be getting some confidence about things to come.
Tying up acreage for the long term - especially for a larger company like Geosouthern - is a smart move. Acreage is the least expensive part of the process and having leases ready to drill when the time is right is a good thing.
I would expect to see more of this - but only with companies who can afford to wait to drill and aren't cash constrained
Don't be afraid the negotiate fiercely with oil companies. They don't always play fair and will assume your ignorant and use it to their advantage. Oil companies are hard nosed, don't be afraid to go toe to toe. 20% royalty no less. more per acre for 2 yrs with no option. or MUCH more per acre if there is an option for more than 2 yrs. Remember you have something they want. They'll negotiate.
Geo Southern had one of my places leased and the lease expired at Christmas last year. My place was part of a larger group of about 1400 acres where everyone signed the same well negotiated lease that had a special release clause in it that required them to send us a recorded release within 30 days of expiration. I gave them one month to do what they were supposed to do and then I sent them a release demand letter. Within about two weeks, I got a call from one of their landmen. This was about March and he said they had been leasing some properties; but, they were at the end of the leasing activity which would cease at the end of that week. I asked him what they were offering and he said they had been offering $500 up until a few weeks earlier; but, the highest he thought Geo Southern would go at this late date, was $300/20% for a 3/2 lease if they could just extend the present lease without renegotiating. Just from picking his brain at the time, I believe I could have gotten $500 and maybe a straight 3 years; but, I wasn't willing to sign another lease without making a couple of changes, one of which is an escalating royalty clause based on the sale price of oil/gas. Anyway, since they would not spend the time and effort to talk about updating the lease, I just told them to send me a recorded lease. I got one more call after that; but, I suspect they were just testing me out to see if I was serious about not releasing. Anyway, within about a week , two members of my family got our recorded release. I have never checked to see if any other members of our group ever got a release or not; but, I seriously doubt it unless they sent a request letter. I will say this. Geo Southern didn't give me a hassle about the release; but, I suspect that the lease clause was a big help in that regard.
Texas shale oil has fought Saudi Arabia to a standstill
"Opec's worst fears are coming true. Twenty months after Saudi Arabia took the fateful decision to flood world markets with oil, it has still failed to break the back of the US shale industry.
The Saudi-led Gulf states have certainly succeeded in killing off a string of global mega-projects in deep waters. Investment in upstream exploration from 2014 to 2020 will be $1.8 trillion less than previously assumed, according to consultants IHS. But this is a bitter victory at best.
North America's hydraulic frackers are cutting costs so fast that most can now produce at prices far below levels needed to fund the Saudi welfare state and its military machine, or to cover Opec budget deficits."
"This sets the stage for an oil shortage and a price spike later this decade. Whether Opec can survive that long is an open question. Most of the cartel need prices of $100 to fund their regimes."
I've always said technology would always improve and I think it still has a ways to go in the shale. It was impossible to predict what innovations would come along and that is still the case. More will; however, the closer this gets to the total capacity of the shale, then the improvements will finally peter out. The companies will however continue to try to decrease expenses as any business does.
We have an offer to lease for $300 an acre, for 3 years, with no option for an extension at our request, in Fayette County and a 1/5 royalty. Company says their interest is in the Austin Chalk play. Based on my conversation with rep, they will sell this lease, as the lease on neighbor's property is by a different landman. Our property and the neighboring property are each less than 100 acre parcels.
Ann:
What part of Fayette County are you located in? We have been hearing about Geo Southern being interested in properties in the vicinity Ammonsville.
We are near La Grange.
Thanks! I wish you good luck; but, IMO, this is a tough time to be leasing, especially at $300 and 20% unless you can negotiate a very good lease. Be very careful signing a lease pushed by any landman unless you have a good attorney familiar with oil leasing spend some time with you and the lease.
Who is a good oil and gas attorney in the La Grange area, or within 100 miles?
I was contacted this morning by a landman representing GeoSouthern. He offered me the same 1/5 royalty, but only $250 as a signing bonus, plus renewal after 3 years. I told him I wasn't happy with the 1/5, he said he would see what he could do and would get back with me. He did say he had room to negotiate with the signing bonus, but thought the 1/5 would remain.
My land is located on Sykora Road, northeast of Fayettville.
On the texas rr site enervest has done something to the Janecka well. That is close to you Bigfoot. Any ideas as to the completion or change in permit??
Yes, it is close to me, about one mile. I will do some checking. Kinda lost interest and haven't even looked at the RRC stuff in the past 3-4 months. I haven't noticed any on site activity so maybe the activity is all on paper so far.
My lease and the rest of the group that signed with Laredo have less than one year remaining and most of these Enervest leases around me that I was involved with up until the final signing will die a little before mine, so by June Enervest will have to do something or let them die.
Thanks for the heads up!
yep I am one of those leases that expire next year.
Mike Steinhauser
Flatonia, Tx
361 865 2540