Global Geophysical Services Seismic Testing in Grimes, Madison and Walker Counties (TEXAS)

Oil and Gas Leasing Help
1

Just received a letter from Global Geophysical Services Inc. wanting to perform a geophysical seismic survey on our acreage for $15/acre. The letter indicates they are looking to test a 300 square mile area in search of gas and oil minerals in the subject counties. I’m quite sure many of you who own land in these counties received the same letter.

Tell me if I’m off about this but I would think someone would have to be an absolute fool to go along with this particularly if you’re in the market wanting to lease your surface rights for an oil and gas lease since there is a chance they could find NOTHING then no one would want to lease your land - ever. Conversely, there is always the chance they could find a “gold mine”, so to speak, and your surface rights would be worth high dollar to lease. The question is, do I really want to take that chance?

I think I’m going to err on the side of caution and give them a big “NO”.

2

If the land has never been shot, then I’d say no, and the next time an oil and gas company wants to make a lease, they will have to pay to have the land shot. When that is done, they will have exclusive rights to the 3-D seismic data, usually for a specified period of time. You should make sure that your lease states that they must release this data into the public domain when the lease expires, or 2 years after, or something reasonable so that other companies will be able to look at the data in the future. Shooting can be quite expensive. If the data shows nothing, then your land may be considered a “dead zone” in terms of leasing, at least for a while. Good luck.

3

My knowledge of the oil and gas business is very limited, but I think I have figured out some things. Some years ago when 3D imaging was new, a company contacted our family about imaging our family ranch. The reaction of my cousin who was managing the property was that if they wanted to know what was down there, they should pay for a lease. This was the general feeling of many of the neighbors.

Now, while our properties are leased, there is no drilling. My suspicion is that when the oil company approaches lenders for financing a well, they have an incomplete package, and lenders are not going to loan ten or fifteen million dollars without having a good picture of a positive outcome.

The whole southwest part of the county is pretty much undrilled now. Think twice before you say no.

4

Your out of hand NO to seismic is fine. Your land, your privilege.

However, consider:

Most conventional wells are drilled with the assistance of 3-D Seismic. Some companies will not pick a drillsite until it has been shot.

On a 300 Square Mile shoot, if everybody took your position then 192,000 acres remain unevaluated.

A permit only is not so bad. After the shoot, if they come back to you post 3-D, then they are buying on a strong lead or a drillsite.

If you do not own 100% of the minerals, the geophysical company can permit any mineral interest owner and your land gets evaluated anyway.

If your acreage position is less than 640 acres, they can stack shot points and undershoot you and still collect data. Legal, no. It is supposed to be blacked out. Can they resist the look? No, By the way, vibrations are not trespass. Only physical trespass counts.

Everybody’s philosophy is different. I want to encourage exploration every step of the way.

5

Mr. Cotten, forgive the intrusion. You will please remember me for the name calling and berating we took together in Fayette County a month ago. I appreciate the help you offer folks on various forums. It’s a difficult thing, this business you and I find ourselves in; everybody needs for us to succeed but then hate our innards when we do.

I have 2800 HBP acres in multiple tracts spread across an area that is being included in a very large group 3D shoot. I own deep rights under some of it, some I don’t. To consent to this shoot I would like to have access to the data and make my own geological interpretations, etc. In the old 2D days that was easy, we got the paper lines, shot point maps and the tapes and we could re-process the tapes etc. over and over to glean what we needed from the data. Three D is a different deal as I do not have the computers or the programs to model the data. I have been offered several “hours” in front of the gather’s computers, that’s about it. I am sure you have run across this issue before, is there another alternative to granting seismic access to my minerals and sharing in the information?

Thank you, sir.

Buddy Cotten said:

Your out of hand NO to seismic is fine. Your land, your privilege.

However, consider:

Most conventional wells are drilled with the assistance of 3-D Seismic. Some companies will not pick a drillsite until it has been shot.

On a 300 Square Mile shoot, if everybody took your position then 192,000 acres remain unevaluated.

A permit only is not so bad. After the shoot, if they come back to you post 3-D, then they are buying on a strong lead or a drillsite.

If you do not own 100% of the minerals, the geophysical company can permit any mineral interest owner and your land gets evaluated anyway.

If your acreage position is less than 640 acres, they can stack shot points and undershoot you and still collect data. Legal, no. It is supposed to be blacked out. Can they resist the look? No. By the way, vibrations are not trespass. Only physical trespass counts.

Everybody’s philosophy is different. I want to encourage exploration every step of the way.

Best,

Buddy Cotten Mineral Manager

6

Dear Mike,

Yes, we took some heat, but we are big boys.

My seismic permit requires a copy of the data in various forms for data that goes across our lands plus a one mile halo. There is also a penalty for not shooting. If your property or position commands enough stroke, you can get it through, particularly if you own 100% of the minerals and have a large acreage position. Also, any current lease should have no seismic granted and if they want to shoot seismic, they need a separate seismic data license.

7

Thank you, sir.

Buddy Cotten said:

Dear Mike,

Yes, we took some heat, but we are big boys.

My seismic permit requires a copy of the data in various forms for data that goes across our lands plus a one mile halo. There is also a penalty for not shooting. If your property or position commands enough stroke, you can get it through, particularly if you own 100% of the minerals and have a large acreage position. Also, any current lease should have no seismic granted and if they want to shoot seismic, they need a separate seismic data license.

8

My family owns mineral rights in Walker County. We just found this out by the way, HUGE SURPRISE. What Shale is there? Or companies? As you may have guessed I am silly stupid and blind with all this. Where do I go (site) to see what is what and who is who? Thanks.