I have a mineral interest in Section 34 Township 8N, Range 4W which is part of the multisection pool for the Charles 0334 1H well which reached TD in mid Dec. 2018 (surface location Section 2 Township 7N, Range 4W).
Native Exploration Operating LLC acquired operations from EOG right before the well was spudded around 11/13/18. I was very disappointed this happened. EOG is one of the best operators around and I got a small independent with no track record.
Since it is a new private company, I canât seem to get any news about when they plan to complete the Charles well, if they plan to drill additional wells in the Charles pool (Section 3 and Section 34) before moving the rig off location. Does anyone have a contact person and phone/e-mail to this company?
Anyone out there have interests where NEO LLC is the operator? If yes, any comments about your experience with them? I donât think they have completed any Scoop Woodford well yet with results. If they have, Iâd like to know how it went.
Any comments on the company and their management? Did they hire people from EOG or other companies with Scoop/Stack experience?
Wonder how much acreage they acquired from EOG in Grady and McClain County.
Iâm worried they will screw up the well and have poor results.
It takes about four-five months to drill and complete a two section well, so if it hit TD in December 2018, it may not complete until April 2019. They have a lot to frac. The Division Orders usually come out five months after first sales and then first payments are not required until six months after first sales. They will determine the productivity of the first well and then make decisions about any future wells. I think you will not get any information if you call them now since the well is not completed.
Native has five wells permitted right now. Six if you count the Charles 0334 1H and maybe more I didnât find yet. Grey Snow 14-1208 1MH was completed in August 2018. No completion is posted, but the OTC website has a few months of production. Gross Production.
Native has a permit for the Medicine Arrows 2-25-0704 which will go into section 35 from the same pad as the Charles. I suspect they will finish that well before making any decisions about the Charles section in 34. They are trying to save the leases and get them both Held by Production first. It spud Dec 12. The may wait until both are drilled and then frac them at the same time with a zipper frac.
Several more have spud, but I do not see completions yet.
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Thank you for your informative information. Do you know anything about the company and their competence in the Scoop/Stack area? Or how big an acquisition they made from EOG? I have seen no news about this sale. EOG had some success, I have read, in the Scoop. Why would they sell out?
http://www.nativeoilandgas.com/
This gives the background of the team. They have the experience.
Do not know about the acreage. EOG is still in the Stack and Scoop. Companies sell their positions in wells all the time if they arenât where their particular focus is. EOG has most of its focus elsewhere. You can look up their Q3 investor presentation. They have two rigs in the Woodford working and 11 in Eagle Ford and 19 in the Delaware basin.
M Barnes,
Thank you for your posts on here. I have not found anything that (with my limited understanding and dated knowledge) isnât spot on. I know it takes time for you to answer this many questions, but it really helps level the playing field.
I too am in âtalksâ with Native and was looking for more âoperationalâ information about them. I see they formed around an infusion of $170 million last year, both partners having experience with large Oklahoma producers. I have not seen many notes about how dealing with them has gone.
I have minerals in 19-12N-5W Canadian County, and am entering almost a year-long conversation. I got them to offer $1,000/acre (28 net mineral) and 1/4 royalty. A birdie told me that in that area bonuses are running from $2k to $9k per acre.
The continued back and forth is the 1) shut-in royalty 2) not wanting to include surface (we own) lease with the minerals, 3) post-production experience. They did not want to include my clauses for non-transferable reclaim cost (had problems with a lower tier producer and closing the prior well) and 4) a guarantee clause that Native would not pay a higher royalty.
So any thoughts would be welcome. We have not hired an oil and gas lawyer⌠yet.
You are wise to ask questions of any lessee. The tract next door to you in 24-12N-6W had offers of $5300 3/16 $5200 1/5 $5000 22.5 $2000 1/4. Dec 2017. I think $9000 would be a bit out of line and would be for a lower royalty. I almost always go for the highest royalty and lowest bonus, since the royalties may be for multiple wells and the bonus is only once. Sec 25-12N-6W pooled for $6250 3/16, $6000 1/5, $2000 1/4 January 2018. I usually start with pooling ask them to match anything that is within the contiguous 9 sections. So your birdie at $2000 1/4 is pretty accurate.
The important clauses are: limit the shut in time to a very short two -three year cumulative time (not consecutive). I ask for $10/ac, not the $1.00/ac. Depth clause, no post production charges, not âenhancedâ (most important), no liability, do not warrant title, Commencement of drilling, no option to renew, no top lease clause. Hard to get the âfavored nationsâ clause (no higher royalty). Caveat: I am not giving legal advice, just information that I have found helpful.
If you have surface, lease it completely separately as that is a different kind of lease. Might need an attorney for that one.
Gerald: In 2012 Vanguard Natural Resources, LLC purchased Antero properties in Oklahoma for $445 million in cash. On February 1, 2017, they filed bankruptcy.
The point is, being able to raise large sums of public money does not always translate into being able to establish viable production.
Frank,
Thanks. My point was they are working with othersâ moniesâmight not be âdrillersâ. But more rolling leases for quicker profits.
Hence looking for folks with field experience with them.
Again, thank you for taking the time to respond.
Gerald
Thank you for taking the time to respond. I understand you are not providing legal advice.
Iâm with your thinking about choosing the highest royalty. Is a larger royalty (than 1/4) even offered?
My lease version (that was rewritten by Native, for the most part) had a shut-in royalty of $1k/ac; their response was $1/ac. I donât want shut-in (95% probability of drilling on our surface). We are the closest suited area to access under old Yukon proper, including existing HP gas collection pipeline. Thanks for a âmarket rateâ for shut-in. Will include the total/cumulative language, had not thought of that.
Native gave and will warrant title and any cost defending it, provided a liability clause, no option, provided a depth clause, and agreed to my ârig capable of drilling to completion on site to start secondary term.â Pleased with almost all the clauses.
Just the post-production clause/âLessor will not receive a price greater than Lesseeâ.
Again, thanks for your time, knowledge, and experience.
Gerald
You are suggesting a binary choice; âdrillersâ and ârollers.â There is at least a third choice, those operators who drill with other peopleâs money with the primary goal of making a profit off of operating the well as opposed to making most of their profit off of the sale of oil and gas.
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Frank,
Thank you for being much more complete and thorough than I was.
There are not just several different types of âplaysâ (i.e., participating interest, working interest, producing interest) and some large actors can do all three at different times.
Thank you again for your insight.
Gerald
