Just as a FYI, my property lease in Blk C-18, Sec 4, comes up in September, but have not heard anything from Silverback either. Maybe its too soon.
r / fred
Silverback is an Encap company, i.e. a startup with raised money where they pluck executives from other companies and start an oil company. They seem to have spent most of what they want to spend right now with the BHP acreage acquisition. They are evaluating what they have bought and seem to be playing it conservatively on what they extend or drill. FYI the big trend now is to drill what is on the schedule but not frac or complete them. Waiting for prices to improve. It makes your lease language pretty important as to what one can do in response.
Yeah, Liz, the prices are really affecting all energy related companies. Noble Energy, founded in Ardmore, OK, has just announced closing its Ardmore (itâs founding home town) and Colorado offices. Theyâre moving everything to Houston as a cost saving measure. I think there are about 450 employees in these two offices.
Iâm also leased to CWEI - until October.
Clayton Williams Energy Announces Plans for 2015 and Provides an Operations Update on Its Core Development Areas
Clayton Williams Energy, Inc. today provided insight on its plans for 2015 and an update on its Eagle Ford and Delaware Basin operations.
Plans for 2015
The Company announced today that its strategy for 2015 is to preserve the Companyâs ability to resume long term production growth once crude oil prices recover. In the current low price environment, the Company has little incentive to accelerate oil production by continuing with non-essential drilling operations. The Company has suspended drilling operations in both of its core resource plays until the combination of higher oil prices and lower drilling and completion costs provides the Company with an acceptable profit margin. The Company has also implemented measures to reduce overhead and trim field level operating costs.
Delaware Basin Operations
The Company has 20 horizontal Wolfcamp A wells in Reeves County, Texas that have been on production for 30 or more days. The peak 30-day production for these wells has averaged 760 BOE per day (79% oil; 10% NGL). Three additional Wolfcamp A wells have been on production for less than 30 days, and two Wolfcamp A wells have been drilled but are yet to be completed.
Additionally, the Company has three Wolfcamp C horizontal wells in Reeves County that have been on production for 30 or more days. The peak 30-day production for these wells has averaged 765 BOE per day (78% oil; 11% NGL). One additional Wolfcamp C well has been drilled but is yet to be completed.
The Company also reported the termination of a previously announced farmout and exploration agreement with Caza Oil and Gas, Inc. (âCazaâ) covering approximately 15,000 net undeveloped acres located along the western flank of the Companyâs acreage block in Reeves County, Texas. The agreement was terminated due to Cazaâs failure to commence drilling operations on the initial horizontal Wolfcamp well as required under the agreement. As a result, all of the farmout acreage will be retained by the Company. Later â Buzz
Thanks, Buzz. Weâre leased by CWEI and keep close track of these reports. Wish I knew what ânon-essential drilling operationsâ meant! Our lease is due to expire in about a year. Of course, oil could recover in the intervening months. Meanwhile, I live in an oil area and you can really see what the downturn has done. Empty lots and business storage areas are crammed with idle oil equipment and pipe. About a mile away from me, the skyline is filled with dozens of parked cranes, from large to immense. Truck traffic is way down, rush hour no longer exists, and I noticed a semi from an auction house pulling into an oil-supply companyâs lot yesterday.
This might be interesting for those of us leased by Clayton Williams - transcript of a conference call related to 2014 and 2015. You have to join Seeking Alpha to read the whole transcript, though it is free to do so. Much that is discussed was already talked about in their 2014 report and 2015 guidance paper, but there were a few more details. Briefly, they may be drilling a few wells âstarting in the next yearâ, mostly in the Eagle Ford but a couple in the Delaware, in order to hold leases. They may be re-leasing key areas that are set to expire if they donât drill. It does sound as if some leases will be let go since they say they should retain about 98% of their current holdings - but that leaves 2% gone, by my reckoning. Tantalizing. Who gets re-leased? Where will they drill the two wells? They also talk about âcontinuous drillingâ - âwhere we took the leases from more professional people.â Anyway, very interesting read.
The number of phone calls and/or letters we receive between now and July going forward will gauge the interest in leasing our acreage. I havenât heard of one-year lease before but that doesnât mean they donât exist. Iâll keep the board posted if we hear anything. I hope others will too. Itâs in the best interest of everyone in the âneighborhood.â
Hi All. Are any of you familiar with the activity in Section 38, Blk 52 and Section 24, Blk 6? We have been sent an offer on Section 38. Thank you! Robin
Liz, CWEI hasnât had any permits on me. yes, there are permits or wells all around me. Reminds me, I need to see if I can find production figures for the Gipper & a couple others nearby.
LaterâŚ
Expiring. Mark would you know anything about Section 24, Blk 6 as well?
I will check on it Robin. I think it may be a little far out of the play right now. But I will check. Can you send me the expiration date and the net mineral acres to Mbenson@klamathoil.com?
Thanks, Liz. Weâll need to compare notes with each other if we get lease offers.
Be happy to share, Ann. Donât know where your acreage is but mine is Section 13, Block 185, A-302. Not as much drilling in my area as some of the hotter parts of Reeves so our results may not be comparable. But theyâll be useful for somebody.
I have a small tract in Sect 300 Blk 13. COG is very successful just 3miles or so to the east and yet CWEI has all but ignored the area. My lease isnât up until mid 2016, but I sure would prefer an alternative to Clayton Williams!
Yes, believe me I know what you are saying. We just had our first horizontal well drilled on us in Sect 258 by Oxy. We missed the good oil prices, but the well is fantastic (through the first two months at least!). Iâm sure they used the upsized frac sand concentrations per stage. Bottom line is that the lease is more than validated and attractive for development.
Fred, I remember you writing about that offer at the time. Yes, low! We might be willing to lease for a year at something around that rate (are one-year leases ever done?) but weâd never lease for three years at that rate. But I guess you canât blame CW for trying!
Robin, there is a lot of activity around your property in Section 38 Block 52, both wells already completed and wells permitted.
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Thank you Liz and Clint. Itâs nice being able to ask others about the activity taking place!
Mark it is in T-7
T-7 looks good. Is your acreage expiring or has it already expired?