Leases In Eastern Fayette & Lavaca Counties


#281

We can only hope it's a positive sign that leasing activity will pick back up again .. Saudis we hear are needing $80 oil to sustain their needs ..but that is Brent Crude .. If they throttle back and get their $80 Brent then WTI would likely be at $74 ...

We've heard a lot that with improved production costs in shale drilling that it will take "$70 Oil" to get people interested in financing .. So? Maybe this is the beginning of the next up cycle , though it will likely not be next Tuesday ..Our area is still in the "C" classification or otherwise known as hind tit . But this refers to oil and who knows what is I store for people all leased now in the Eastern Strip , but it sure seems that drilling has slowed way way down recently ..


#282

I’m following you, WI. Seems like activity is bound to pick up with the price jump. The lease on my property (SW of Sburg) expires in a few months, w/ an option to extend. I suspect many others in the area are also nearing expiration/extension dates. Hard to believe operators are just going to let those lapse under the circumstances. IMHO


#283

Seems like the last activity was with Tri-C Resources in the southern part of Fayette county. Did anybody get leased with them in an area other than FM 1295 / Darilek Rd area?


#284

At this moment, I think there are too many good wells being drilled in Northern Fayette and into Washington counties, etc. Most of the companies who leased in various areas around Fayette are probably focused in that area right now. As noted around the time of NAPE, it doesn't look like Santa Rosa is going to do anything, but are electing to sell. Which was a lot of leases South of Schulenburg, including the purchase of the Bigham unit to the West.

I believe its going to take someone stepping out to drill a "risky" well. No clue who that may be, but I firmly believe someone will do it in the next few years (based off of the last round of leasing in 2017 with 3 year primary terms). Ideally they'd do it now while prices are surging a bit, but why go somewhere unproven when you can drill solid wells at a higher oil price? I see both sides of the coin...


#285

Yes, Tri-C leased our acreage about 3 miles SE of Shiner on CR 531. I was told they leased about 900 acres east and north of our acreage.


#286

I think Santa Rosa partnered with KEW Drilling, we were leased last month.

West of Moravia, I was told they were attempting to put together a unit, but who knows.


#287

They did, that's correct. But I was told they have no intention of drilling in Fayette and plan to focus in Washington. And will market the Fayette stuff. But of course, things can change...


#288

First, Eagleford wells are getting LLS (lousiana light sweet) prices which are about 10% over WTI, and usually a tad bit more than Brent. However Chalk wells are usually priced closer to WTI. Tri-C hit some big glitches in fayette county by FM 1295, so they went all in right close to Shiner, and will drill a well there. Lavaca county Texfile has been updated and you will see Tri-C held all of their leases and reported them all as once ala Jeter. I have more info forthcoming, just have to verify a couple of stories I heard before repeating them......


#289

Also, I just a reminder that KEW and Ross are actively selling all of their Fayette and Lavaca leases.....they have actually some possible buyers...keep you posted....


#290

I am for sure interested in what you have to say, ML. Ross had that NAPE flyer/ package but I never heard that they actually had a prospective buyer. I’m about ready for some news… any news. Awaiting your information with bated breath…


#291

Is this the "Rifle Prospect" that Santa Rosa had initially put together? I have heard word as well, I am curious how it compares to what info you have.


#292

The KEW NAPE flyer cites the Rifle Prospect, and it includes Bigham. I’m not able to check right now, but I think I posted both the KEW and Ross flyers here sometime around the end of February. If not let me know and I’ll put them here in a few days.


#293

Just looked back, you posted both. Ideally someone comes in and buys both packages since they are all next to each other.


#294

I didn't think there was enough land still left around Shiner to put together a unit.


#295

So each of the fliers claim ~12,000 acres and I’m guessing that MOST of those leases were for ~$650/acre. That’s $15,600,000. So maybe the selling price is double that at about $32 mil?

I’ll bet there’s a bunch of investment capital companies out there that are anxious to make some deals to get in the oil business now that oil is above $70.


#296

Can also factor in a lower price per acre but a higher override. Most of the leases were 20-22.5% royalty, so it leaves some room for Santa Rosa/KEW/Ross to carve out 2.5-5% ORRI whenever they do elect to sell it.


#297

Tri-C did lease a little over 3000 acres in Fayette county....however they do not have any continuous acreage over 224 acres at this time. This 3000 acres is in 8 different surveys. they will have to strike a deal with either tight rock or KEW to get a unit. On your specific property they did not lease anything between Darilek road north to the end of Prost units C and O to your west. Tri-C did also not lease any of your neighbors that surround your track, including clark, covingtom, archer and velasquez. Simper to your south just got picked up by Penn 2 months ago. Looks like Tri-C's best bet will be in the Duff/Muldoon surveys, and Lacey survey. Tri-C is in talks with KEW for a portion, if not all of their leases in Fayette county.....however there is an issue in price. Good Luck !!


#298

There is way more activity with the KEW tracts as far as buyers....but still nothing due to price...but they are close and could sell at least a portion. As far as Ross, I heard of 2 companies interested...one being Geosouthern...but the price is an issue, as well as it being "unproven" in their eyes. I believe I was told that Geo wanted more of a farm out....ability to pick and choose, pay nothing up front, but split cost and profits when and if they would drill on any of the tracts.......Not what Ross was looking for I guess...


#299

Have you heard at all what prices KEW and Ross are trying to get? Any ideas at to why more action on KEW vs Ross? Seems like if you wanted one, you would want both?


#300

Interesting. I have heard of two companies interested in the KEW tracts. Curious if they're the same companies you have heard about...