I know there has been lots of chatter regarding Key Energy and others, and what they were potentially up to in this area? I’m assuming it’s all died down? They let a number of our leases in the area expire and have yet to be contacted to lease again.
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I think you’re referring to Key Exploration. Believe it or not, Key recorded some new lease memos and lease extensions in Cherokee County on March 11.
Their project remains a mystery. Leasing began back in February 2021 with two-year seismic options covering more than 50,000 acres. More than 90% of those options were converted into leases, and many of those leases have been extended.
Maximus is the drilling operation associated with Key Exploration. Back in October 2025, they filed a drilling permit request for a horizontal Haynesville well to be located in their lease area, but they never completed the submission.
Just a very strange situation.
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My best guess is from an overall land/lease play it was a fairly cheap experiment compared to some of these other large scale shale plays. I am simply referring to lease bonus prices.
I’m not sure it has been cheap! Let’s assume Key ended up leasing about 40,000 net acres. Each $100 of bonus money costs $4 million, so even a low bonus amount of $200 costs $8 million. I don’t have a good feel for land costs, but landmen are not cheap, so that’s a significant additional cost.
If Key actually had seismic work done, that is another significant cost. 3D seismic runs at least $50,000 per Section (640 acres).
My guess is that the leasing project costs are north of $10 million for sure, which makes this five-year timeline even more strange. Key has either assembled a very patient money group or a big E&P company is funding this. In prior posts, I speculated that a company such as Expand might be connected with this project.
Maybe this is the year we find out!
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I should have used more context when using the word “cheap.” What I meant is that it’s a cheap experiment for a large E&P if it is one of those actually behind it.
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