Mr. Rothstein, I don't have minerals in Daniels county, but I don't think I have to to comment on things I think someone else has missed or hasn't mentioned. I realize that they showed you a map, but does that have any relation to reality ? Would you have known what the map denotes if they had not told you ? I didn't see the map they showed you, just the one on Shales website and I'm telling you what is being reported and what statistically must be do not add up. I think it likely that Shale has a lock on on over 100 spacings, that does not necessarily translate into having a lock on your spacing. If Shale has a lock on your spacing, that does not mean they will necessarily will drill it anytime soon. Four permits/wells, might just be enough to prove up part of the acres for the big flip, take profit and leave. Permits are also meaningless, they are cheap, expire, get cancelled and renewed. If I have learned anything you don't expect the well until you see the rig on site. So far it's hot air and bugeted PR. Maybe Shale will pull in some rigs and start drilling but why only 4 permits ? That sounds like proving up for the flip and not a drilling program to me. One rig could drill those 4 permits in 4 or 5 months. If there is just one rig it will take decades to drill what they say they have. Maybe they have plenty of money for the leasing and none for the drilling, and that's all they need for the big flip. The good thing is you can wait and see, if your acres are desirable now, they will be even more desirable after a well is drilled close by and proves there is good production. What's the rush, you have a year or more I would wager before you saw anything like real action. Finally I am not adamant that Shale is not legitimate drilling operators, I just have not seen a single piece of evidence that they are. Shale is a young company, to the best of my knowledge they have not drilled/operated a single well, please let me know if I am wrong. I will continue to post if I notice anything else, but if my posts make you unhappy, please do not read them. I wish you luck with your minerals.
Alright guys....It's legitimate. I said on that last post that I was going to call Sam Tallis and Sid Greehey. I did call them and left messages for both. Once I did not hear from them, I started to get concerned. However, a few days later both text me and said they would contact me soon. I left it at that, but was honestly a little concerned. If you've read my posts, I have always been more concerned with getting my minerals drilled and leasing to the most legitimate operation out there. I went to Scobey, checked out Shale Exploration's operations and asked around. It appeared to me that they were the real deal and the only legitimate company out there. The other companies leasing wanted to meet you at the local bars and didn't have an office or appear to have any backing. I even got the chance to meet with the two gentlemen at the helm of Shale Exploration- Sid Greehey and Sam Tallis. They took me to dinner at the Silver Slipper (great chicken dinner, seriously- "The Slipper Chicken") I have been on the verge of signing with them for some time because not only did I discover that Mr. Tallis and Mr. Greehey have their own backing (you can look it up), but they kept telling me a big company was going to be the driller. Then, I got a call yesterday from both Tallis and Greehey on the same line. They said that the big company they had been talking about had announced at an investors conference their intentions to drill in Daniels County and that they had leased 300,000 acres- APACHE CORPORATION!!!!!!!!!!!!! They told me that this is the story.
Shale Exploration put together the Daniels County prospect and in the early part of 2012 realized that the prospect was too big to operate (drill) to its full capacity. They said they needed a major oil and gas company to drill all the acreage they had acquired. Apache approached Shale in February 2012 and after a month of negotiating, Apache became the operating company. I asked if that meant that Shale is a lease flipper and they said no because it is Shale Exploration's prospect and they remain the exclusive leasing agency for the Daniels County prospect. Apache is the driller / operator and has an ongoing contractual relationship with Shale Exploration who is the exclusive leasing company for Apache in Daniels County. This means that if you want Apache to drill your minerals, you have to lease with Shale Exploration. Having heard this and looked up Apache Corporation, I am calling Shale tomorrow to send me another lease packet (I've written on mine, etc...) Tallis and Greehey said that wouldn't be a problem.
How unbelievably awesome this is. Look up Apache....This is exciting my friends!!!!!!!!!!!!!!! There's oil in them there rolling hills!!!!!
Ted, sounds like you bought the "whole Hog" theory, Happy for you, I really am....... However in my oppinion, when you get the whole hog, you allso get the stuff on the hoof........ I recieved the lease and put it where it belongs ( in my humble oppinion) right into the trash.... I even went so far as to ignore the follow-up phone call....... Now according to you that shale has "exclusive" leasing and I would "have" to lease with "shale" to get drilled, I guess I will miss out on the " golden oppurtinity"..... Oh whoa is me, if you need me, I will be out in my "pool"
That's funny man....I never said anything about a "...golden opportunity." However, the fact that my mother's grandfather, many years ago, had the foresight to keep the minerals when he sold the farm and that is to my benefit, I will not apologize for. I am sure he is smiling down and in my experience, that is the way life is. Sometimes you win and sometimes you loose. This time I was correct as this will be drilled by a big operator (Apache) with the capacity to drill all the acreage Shale Exploration has leased and continues to lease. Make no mistake, it is luck that I inherited the minerals, but it has been work and cost alot of money and time for me to research this and go with the right company- Shale Exploration. I will not apologize for that either. I was lucky and I was diligent in my search to sign with the correct company. I am sorry if you signed with another company and your minerals will not be drilled. Maybe they can do something if that other company doesn't pay you or something....I don't know.
Your references to buying a hog and also getting the 'you know what' from the hoof are funny but disparaging to Shale Exploration and Apache. These are reputable companies. I am not really certain what you mean by that, given that you have to lease with Shale to be drilled by the operator in Daniels County- Apache. Those are substantiated facts, the evidence that I have been looking for all along. I guess you are referring to the downside of any deal with the deal being my lease with Shale and Apache drilling. I think the downside of this deal would be that they spend the $10,000,000 to drill an oil well and nothing is there. The upside would be that I, "...load up the truck and move to Beverly- swimming pools, movie stars!"
Any any event, I wish you well sir and if you do have minerals, I strongly advise you call Shale Exploration because that is the only way your minerals will be drilled in Daniels County in the foreseeable future.
Here is a 114 page Investor Day presentation by Apache Corporation. They presented this in Houston 2 days ago on June 14, 2012
They state they have 300,000 acres and the lead position in Daniels County and project 1 billion barrels of oil.
see page 4, see page 100+ for mention of Daniels County.
see page 12 where they project the majority of their growth being onshore US development over the next 5 years.
It is an impressive and comprehensive presentation by Apache Corporation. Here is a link directly to Apache's website:
Wilson
Thats not entirely true, if you didn't lease with shale and you leased with another company and your mineral rights are next to land that Shale drills on, most likely Shale will have to pay you some royalty, maybe more than the people that signed with shale.
Ted Rothstein said:
That's funny man....I never said anything about a "...golden opportunity." However, the fact that my mother's grandfather, many years ago, had the foresight to keep the minerals when he sold the farm and that is to my benefit, I will not apologize for. I am sure he is smiling down and in my experience, that is the way life is. Sometimes you win and sometimes you loose. This time I was correct as this will be drilled by a big operator (Apache) with the capacity to drill all the acreage Shale Exploration has leased and continues to lease. Make no mistake, it is luck that I inherited the minerals, but it has been work and cost alot of money and time for me to research this and go with the right company- Shale Exploration. I will not apologize for that either. I was lucky and I was diligent in my search to sign with the correct company. I am sorry if you signed with another company and your minerals will not be drilled. Maybe they can do something if that other company doesn't pay you or something....I don't know.
Your references to buying a hog and also getting the 'you know what' from the hoof are funny but disparaging to Shale Exploration and Apache. These are reputable companies. I am not really certain what you mean by that, given that you have to lease with Shale to be drilled by the operator in Daniels County- Apache. Those are substantiated facts, the evidence that I have been looking for all along. I guess you are referring to the downside of any deal with the deal being my lease with Shale and Apache drilling. I think the downside of this deal would be that they spend the $10,000,000 to drill an oil well and nothing is there. The upside would be that I, "...load up the truck and move to Beverly- swimming pools, movie stars!"
Any any event, I wish you well sir and if you do have minerals, I strongly advise you call Shale Exploration because that is the only way your minerals will be drilled in Daniels County in the foreseeable future.
Ted, sorry if you took my comments the wrong way, when I say I am happy for you, I really do mean that. You have done extensive research into this and I applaud you for that. I can assume that by your thread, you probably hold extensive minerals in the area in question, and probably could go to "Beverly" however that was not the "pool" I was refering to. My mineral holdings,"allso by inheritance are vast, but minimal, my eggs are spread out over three states and 16 individual countys... Unfortunately my knowledge of the mineral side of the spectrum is limited as I have had my toes in oil for close to twenty years, I never bothered to learn up on the mineral side until now...... The "golden oppertunity" was not meant to be a quote by you, I just got carried away with the hash marks.... I go by the basis of what I have heard forever and that is that " The Oil companys have more money than God" and more importantly $30,000.00 to an oil company is the same as a nickle in your pocket... I have also been told by a lawyer to Never,Never sign a lease that is longer than three years... I will dilligently wait and when the region has activity, I feel confident my minerals will be looked at with more interest than now.......... I hope for you the best in your endeavors....... Brian...
Big Daddy...Actually that is not true when you know about unitizing unless I am wrong about it all. My understanding is that Shale and Apache are under no obligation to pay for minerals they do not want or need. They have enough acreage to unitize now. If you want Apache to drill your minerals, you need to sign with Shale because Shale is the only leasing agent for Apache and Apache is the only operator in the area capable of drilling.
Ted, I think you are thinking it is like in Texas where they do not necessarily have to pay for draining you. Montana has different rules. In Montana if you don't lease to the operator or anyone else you are simply considered to be non-consent and they will have to pay you for your oil anyway, 12.5% from the first barrel and 100%, less operating expenses, after the well is paid off. I wouldn't make much of Apache being the only company in the area capable of drilling until they actually drill some wells in that area because that area is still new and you don't know who may decide to move in on the other 2/3 of the acres that Shale/Apache does not have leased.
I don't know anything about Texas, but I have researched this and a friend attorney went over it with me. He explained it to me like this. Forgive any disjuncts in this because I am copying and pasting what he wrote to me and mixing it with my knowledge which is basically paraphrasing what he and I have talked about over months of beers at our local haunt. Here goes:
In order to prevent drainage of one person's minerals from a well not located over their minerals (next door, so to speak), state oil and gas boards have spacing rules and units. If an oil company wants to drill, they have to petition the oil and gas board of that state to form a unit. A unit in Montana is 1280 contiguous acres, or two sections - North and South. The oil company must have leased a majority of the mineral owners within that unit in order to unitize. Non-consenting mineral owners (like you are referring to above) can be "force pooled" into that unit, in order to prevent waste of the oil. If the mineral owner is force pooled into that unit by the oil and gas board, that mineral owner will have to decide whether they want to lease their minerals under the same terms as the majority of the mineral owners in that unit or whether they want to become a working interest owner. A working interest owner will have to pay 100% of the operating costs on their percentage of minerals within that unit (the non-consenting working interest mineral owners of 10% of the minerals within that unit must pay for 10% of what it will cost to drill, frack, extract, transport and sell those minerals). It doesn't make sense to do that unless you have alot of cash to loose if the well is a dry hole and alot of acres where you would simply form the unit yourself. If a mineral owner leases, on the other hand, their risk is extremely limited, if there is any risk at all, because they are actually getting paid a bonus and have to do nothing. There is no risk. Working interest is a ridiculous path for a mineral owner unless they have enormous sums of cash to risk and a very large percentage of two sections running North and South that can be unitized. Additionally, with shale rock (like in Daniels County), the oil is within the shale rock and not so free flowing. As such, the spacing lines are closer because drainage from another field is virtually impossible. It's not like a lake of oil underneath that flows all around. Besides, if you are not in the unit, you are not in the unit, period - you do not participate (cost or royalty).
Here, Apache and Shale have already leased 300,000 acres. Why would they risk putting themselves in a situation where they would have to, in effect, partner with a mineral owner when they already own 100% in many contiguous 1280 acre units. Unless I am misunderstanding something, we know for a fact that they have 100% in at least 4 units because they have filed for 4 permits. I assume the number of permit requests is about to skyrocket. I cannot think of any rational reasons, again, based on the evidence, that would justify not signing with Shale now and drilling with Apache. They have requested drilling permits, they have the capital reserves to drill it and no other big company is operating there. The rest of the companies are like a bunch of coat-tail hangers on, like squirrels trying to get a nut, as some comedian used to say. Believe me....it's a joke, I was in Scobey and observed these companies- I will only say that they are not professionals, they are amateurs.
So in the end, I again ask, where is the evidence of another company that has the backing to do this and why would you gamble your future on the hopes that some other company is coming in there, maybe. We know Shale is the real deal and we know Apache is the real deal and both are there leasing, getting permits and surveying to drill now. I'd rather lease my minerals, now that I know this is for real, rather than wait. I think we've all waited enough and the evidence is clear what to do. At some point, hesitancy becomes the weak and frail path and the sure-minded, deliberate and affirmative actors are rewarded for their risk and hard work. That's just life.
In my experience, from what I have actually seen, I would say it's rare that a company holds a monolithic block in a 2 section spacing outside of state or federal lands. An operator would be stupid not to drill because they only had 90 percent of the mineral acres in the pool if there were oil there. Talk about cutting your nose off to spite your face. If Apache won't drill where they don't have a monolithic block most of the acres they have leased are useless and a waste of bonus money. No disrespect meant Ted but I think your math is shaky. I believe there are over 1.2 million acres in Daniels county. Shale/Apache have leased 300k or 400k [heard it both ways] acres and their map shows their leasehold spread over 750,000 acres. Statistically they can't have all of the spacings 100% owned.They will be drilling where the oil is even if they only have 60% of a spacing. Drilling is geology driven and geology doesn't care that you don't have the lease on all of the acres. I am happy for you that you are satisfied with your leasing arrangement but I think you are wrong telling people they will not get drilled in the forseeable future if they do not lease to shale. That sounds like a landmans scare tactic. How many wells is Shale up to now ? And they only have 4 planned? Of hundreds of spacings ? How does that equate to being drilled in the forseeable future ? It's all talk so far. I think it sounds like hype. Ted, you also left out that people could be carried interests get 12.5% royalty from the first barrel, the other 87.5% going to pay for the mineral owners part of the well and operating expenses and when the well pays off they will get 100% less the cost of operations. If the well never pays out, the mineral owner owes nothing because the operator can only recover from production. People always seem to leave that part out. The mineral owner only risks the bonus he didn't get for leasing and possibly a few % royalty if it's a bad well, but if the well is that bad, leasing won't save you. Ted, I wish you good luck with your minerals.
I agree with Mr. Kennedy's take on this, it makes sense.
Amen Brother!
I am also with you RW, and like I previously said, I will be out in my "pool"
I recieved a letter from "them" today,
Bonus + Term:
5yr/5yr
$250-$300/$500 1/6 Royalty
Second Paragraph:
"and will ramp up our leasing efforts over the next few months." [rem: Next Few Months]
Fifth Paragraph:
"In order to be included in the future drilling program, Shale needs to aquire an oil and gas lease from you by july 1st." [rem:Next Few Months]
Ted, you may be right, I HAVE to lease to them to be included!!!
I also recieved a phone call and I asked him if they would consider a three year lease, he said no, I said ten years is too long to be tied up and said goodby.
That is my offering for today....... Brian...
I still do not understand what you are talking about Kennedy. You are telling me that it makes sense to not lease and to become a working interest owner in an oil well unit? I'm not hurting for cash, but the way I see it, a mineral owner has to come up with their percentage of the costs for that unit. You can look it up and see that drilling one oil well costs ten million dollars at a minimum. I don't know how many they can put in a unit, but let's say five. Therefore, that is fifty million dollars. If someone owns 40% of the minerals in that unit (512 acres), they will have to come up with 40% of 50 million dollars or twenty million dollars, right? Yes....once it is paid off, they would get 40% of the oil coming out of the ground at roughly 100 dollars per barrel. However, who has 20 million and wouldn't they have to come up with that money prior to drilling? Who would give them credit for that, the oil company? You must be seeing something that I am not, because your math is shaky there, I think.
As far as leasing with Shale or another fly-by-night, I'm back to the same thing as always. No one can be 100% certain of anything. Therefore, it is wise to look for concrete evidence and to justify one's decision based on that evidence. Here, there is ample evidence that Shale is leasing for Apache who will drill for oil in Daniels County. There is not ample evidence that these other companies are leasing for any big company that has the backing to drill for oil in Daniels County. Therefore, if you want to get your minerals drilled in Daniels County, you need to lease with Shale Exploration. Seems pretty simple to me.
Ted, I am curious and others have asked. Would you mind revealing how many acres you have in Daniels County? and also wondering if you have signed yet with SE? I assume so based on your recent posts?
Thanks. Just trying to understand your personal story a little better.
Wilson
Big Daddy....From my understanding, you either are in a unit or not. If your minerals are right up next to a unit line and the oil company drills in that unit and hits the mother load, you get nothing. You have to be in the unit from what I understand. In this case, because Apache is the driller, you would have to sign with Shale to be in a unit.
Wilson....Yeah man...I wish I had more, but I have two 160 acre quarter sections side by side that run East West. The good news is I own 100% of that. I have another 320 acre half section in another area close by, but only hold 40% of that. I'm not a big guy by any stretch, but it is a good bit if it gets put in a unit like I would want it to be.
As always, I am still on the verge of signing. I have concerns and this happened before. From the start, I have learned about this business and searched for reasons to sign a lease with company x or company y. I approached this like building a brick wall with pieces of evidence because, like I said earlier, no one really knows the whole truth 100% and you cannot trust people in this world or this business. I thought it would be a good idea to search for evidence on companies regarding their legitimacy and ability to drill for oil. The only company I have found ANY evidence about those subjects was Shale. Brick after brick of evidence has come to light after my searching and the searching of others. This evidence suggests that Shale is the only legitimate company leasing and that Apache Corporation will drill only those leases for oil. However, each time a brick comes to light and I post it, several people will suggest that Shale is not legitimate or that Shale will not drill or that mineral owners need to sign with one of these other companies. I guess what I am saying is, I just don't get it. For me, it has always been about finding the company that can drill for my minerals and not trying to prove a company cannot drill for the minerals. I just see that as backwards thinking, but it appears that alot of people on here are hell bent that Shale Exploration sucks and that Apache will not drill for oil. They cannot point to any evidence to back that up, however, I can point to plenty of evidence to back up the opposite. It appears that some, despite the overwhelming evidence to the contrary, are convinced that Shale and Apache are not doing what Shale and Apache are doing before their very eyes. I am not certain if these people signed with another company and are jealous that they did not sign with Shale, because they now know that you must sign with Shale in order to get drilled now, or if they are just plain hesitant because they are scared. I alluded to this in a different post where I stated that people who wait are hesitant and weak whereas people who build a case and act affirmatively on the evidence are the ones who will be rewarded. I firmly believe that and thought I would get a resounding "YES, you are correct, Ted!" However, what I got was more of the same doubters. It concerns me that more people do not see what I see.
Rothstein, at least it bothers you that nobody is jumping on your bandwagon, that means there is hope for you yet. It is very early days yet. I don't know who told you that you have to sign with Shale to have any chance to be drilled in the forseeable future. Apache is going to drill where the oil is, whether they have the totality of the spacing or not, and others will either participate, flip their acres to Apache for cash and retaining an interest, unleased mineral owners may go non-consent and be carried interests. I have 10 producing wells and two more drilling right now, in none of them does the operator have more than 95% and change of the mineral acres in the spacing, and I believe the lowest operator leasehold in any of my spacings is less than 60% and I believe that operator drilled in a hurry because if a couple more leases came up for renewal they could have lost the spacing altogether. Rothstein, niether you nor anyone else must lease this year or probably next. The only way produceable acres are going to become less desirable is if they are proven to be poor or dry wells or the price of oil plummets. So far, all the proof is that they could possibly do something, that does not mean they will. So far the leasing has been pretty cheap. Until recently we were hearing in the neighborhood of $60 an acre and 12.5% from Shale and on their website they brag about the ten year leases they probably signed for like money and royalty. It's not like they leased for thousands of dollars per acre and have a huge commitment. Rothstein, I hope it all works out the way you say except for the scare tactic part of if you don't lease to Shale you won't be drilled in the forseeable future, but so far there is what they told you and what they possibly may do, but no real evidence. I don't think you realize yet that oil men trying to obtain your acres tell you what they think you want to hear along with what they want you to think they are going to do. I have found that 80% to 90% of what they say can just be thrown out unless it's in writing in a contractual agreement. I still wish you luck with your minerals.
Mr. Volney, it sounds like the standard landman "limited time offer" and is it just me or does it sound to anyone else like a company doesn't intend to drill when all they will only bargain for is a lease that allows them to have the option on your acres for 10 years ? I used to get offers from landmen and they would tell me the offer was only good until friday and I would reply that the answer was no right now because that was not enough time to consider the offer properly.
B Volney said:
I recieved a letter from "them" today,
Bonus + Term:
5yr/5yr
$250-$300/$500 1/6 Royalty
Second Paragraph:
"and will ramp up our leasing efforts over the next few months." [rem: Next Few Months]
Fifth Paragraph:
"In order to be included in the future drilling program, Shale needs to aquire an oil and gas lease from you by july 1st." [rem:Next Few Months]
Ted, you may be right, I HAVE to lease to them to be included!!!
I also recieved a phone call and I asked him if they would consider a three year lease, he said no, I said ten years is too long to be tied up and said goodby.
That is my offering for today....... Brian...
This is exactly what I'm talking about Wilson. You see that there is zero evidence of another legitimate company leasing for a legitimate driller (other than Shale Exploration) and still you have people on this blog slamming the only legit company with a drilling permit- Shale Exploration and Apache Corporation- look them up people. It doesn't make sense. Kennedy....did you lease with another company? Where are your minerals? Do you have minerals? What company did you lease with and do they have any backing? If you are against Shale and Apache, tell me why and back it up with facts rather than speculation. We are all here looking for the truth, right? A search for the truth (scientific method) involves finding facts. You are asserting that Shale Exploration and Apache Corporation are not going to drill for oil in Daniels County and that a mineral owner can stand by and watch this all take place and wait for some alleged company to come in and lease their minerals and have the huge backing to drill for those minerals. I just don't get your reasoning on that. I could be completely wrong on my assessment, but my assessment is based on the facts and yours is based on speculation. Don't you see that? Don't you see that logically one must sign with Shale Exploration in order for their minerals to be drilled by Apache which is the only company operating in Daniels County that is capable of drilling a freaking 10 million dollar oil well? I'm not understanding what you are advocating.