Taylor: The current Colorado OGCC map (attached) shows that Bonanza Creek (an active operator) is already drilling a well in a southerly direction. That is a well with a 2-mile horizontal length! So there is activity in the local area. The same pad looks like it was permitted by Marathon a couple of years ago, but never drilled. The Marathon well would likely have crossed your property.
The question now is whether or not the active party (Bonanza Creek) has taken steps to form units, which would also include your acreage. Then, Bonanza Creek might drill a new well going north, following the old permitted path of Marathon or longer. You can do your own research on the Bonanza well on http://cogcc.state.co.us/cogis/FacilityDetail.asp?facid=12335246&TYPE=WELL and click along the top row under “Doc”. That will lead you to a large number of documents to screen about the plans.
You can do the same for the old Marathon permit on http://cogcc.state.co.us/cogis/FacilityDetail.asp?facid=12335270&TYPE=WELL
Bottom line is that renewing your old lease might be easiest (assuming that all other terms are OK, but check with an attorney). Same bonus sounds OK in today’s market. However, in return for the “low” bonus try for just a two-year renewal to get them off dead center. And do not give them any renewal option.
Good Luck! And let us know, if you make a deal, because that helps us understand the changing market.
John Gustavson
1191-Localactivitymap.docx (436 KB)