Reeves County, TX - Oil & Gas Discussion archives


#11595

Concho to acquire RSP Permian in basin’s “biggest transaction ever”

In a transaction that Investor’s Business Daily called “the biggest ever in the Permian Basin,” Midland-based Concho Resources said this week it will acquire Dallas-based RSP Permian in a $9.5 billion all-stock transaction. The deal will create the Permian Basin’s largest crude oil and natural gas producer from unconventional shale. Tim Leach, Concho CEO, told reporters in a conference call Wednesday, “As companies get to this point and look at their assets and their activity, the efficiency you can gain by a bigger balance sheet and a bigger program is really what’s driving this.”
The Wall Street Journal said the deal “could herald the start of a consolidation push in America’s most active shale-drilling region.”
The deal will add 92,000 net acres to Concho’s existing acreage in the Permian to bring its total net acres to 640,000. The combined company will run the largest drilling program in the Permian Basin with 27 rigs. In 2017Q4 production on RSP assets totaled about 55,500 boed on a two-stream basis (80 percent oil, 20 percent natural gas) and 62,400 boed on a three-stream basis (71 percent oil, 17 percent NGLs, 12 percent natural gas). The transaction adds 2.2 billion boe of resource potential (two-thirds in premium resource, Concho said). The deal includes RSP debt and is expected to close in 2018Q3.

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Expect Concho to buy up some other exploration companies in Reeves

and Culberson counties....they would like to eclipse Apache, Noble-Permian, Primexx, and Oxy in these counties.

And don't forget Clayton Williams landmen buying everything they can in

Culberson county. Drilling is about to go crazy in these two counties.

ol' Lawrence in Verhalen


#11596

We just got our first royalty check and an explanatory form to go with it. We are trying to understand the form and have a couple of questions I hope someone can answer.

First, there is something called PLT listed in the same column as gas and oil. My researches indicate PLT is Production Logging Tool - but that doesn't make much sense since there is actual production and dollars listed for it. That wouldn't seem to indicate a tool.

Second, we always understood the first check would probably be for several months. But the column for Production Month and Year indicate only one month - January 2018. Do they roll several months into one month for the first check? TIA.

Liz


#11597

PLT...Produced Liquids Treatment/Transfer....any condensate for gas wells

or crude oil for producing wells.

ol' Lawrence in Verhalen


#11598

Dusty and TennisDaze, thank you so much for your valuable information. This is always a learning curve in the oil and gas business. I really appreciate your help.

Louise


#11599

Thank you so much, Lawrence!

Liz


#11600

Liz...in answer to your second question, it depends on the producer. Some will send the royalty holder an accounting every month with their check....others may opt to pay you quarterly and have an accounting page

included with the check. At the end of the year you'll likely get a 1099

listing your royalty income for the year from them.

ol' Lawrence in Verhalen


#11601

Lawrence, our lease requires them to pay monthly, at least after a certain period right at the beginning. So this is our first monthly check. From our readings on this site, we had assumed it would likely cover the first two or three months of production. However, the form says it is for January production and lists no other months. So then we wondered if it is common for the first two or three months of production to be rolled into one month for the purposes of this form and initial payment. IOW, the other months wouldn't be listed separately for this first payment.

I've done all the checking I can do and haven't been able to find production info online yet for these two wells. So I can't find out the answer that way. I guess we'll know more when the second check comes. Happy Easter to you!

Liz


#11602

Liz....likely your royalty check will have a month 'drag' on it. Like my

royalty check for February just came in March 28th and I'll get the check for March the end of April.

By the way, don't let them direct deposit your royalty check in your account because they put a small script clause in the agreement to allow them to 'claw back' from your account any overpayment mistakes their

accounting group might make. I make them issue me a paper check each month and personally deposit it in my account....they have no direct access.

ol' Lawrence

ol' Lawrence in Verhalen


#11603

We actually get the payment through a trust which holds the mineral interests. The oil company pays the bank that manages the trust. When the bank called us, they mentioned looking at a check they had in hand so I think we're OK on that front. Thanks for the heads-up though! We will definitely make sure the oil company cannot access our account there. This is great advice for everyone.

Liz


#11604

The news reports of the Concho acquisition of acreage stated the cost per acre acquired worked out to $75,000 an acre.

Anyone have any idea of what acreage valuations actually are in Reeves County? Are there trends, are there zones of estimated value?

Thank you. Happy and Joyous Easter!


#11605

Is there a "rule of thumb" between lease bonus for a 1-year or 2-year lease compared to 3-year lease for 200 acres in half section?


#11606

Liz, Be sure to check the CONG on the Texas Comptroller webstie. You can use the well permit number if no lease number has been assigned. Add the county and use date formats such as 1710 (Oct 2017) and 1801 (Jan 2018). The oil companies cannot delay reporting sales volumes and revenues and paying the severance taxes. This is public information.


#11607

TennisDaze, thank you for showing me a new place to check for info. I didn't know about the Comptroller website. It will be very useful in the future. I can locate info on an old well in the area so I can't be doing everything wrong. But zippo on these two new wells. I guess all will be revealed in time. Thanks again.

Liz


#11608

TennisDaze, I've continued to work and did find the info. Thank you!

Liz


#11609

I am in the process of selling some Net Royalty Interest Acres in Reeves Co. which I inherited back in Jan. 2008. Any suggestions on determining the historical Fair Market Value for my capital gains tax cost basis? Are there appraisers who specialize in this or is there a public record area I could check for comparable Net Royalty Interest sales?

Patrick


#11611

TEXANS DO WELL WHEN OIL AND NATURAL GAS DOES WELL!

When our state’s oil and natural gas industry does well, all Texans benefit. And the proof is in the numbers! After a year of remarkable and sustained recovery, the Texas oil and natural gas industry paid just over $11 BILLION in state and local taxes and state royalties in fiscal year 2017 – providing the equivalent of $30 million a day in funding for our schools, universities, roads and first responders. Texas school districts received $1.1 billion in property taxes from mineral properties producing oil and natural gas, pipelines, and gas utilities and counties received $336 million in oil and natural gas mineral property taxes. Beyond state and local revenue, Texas saw steady oil and natural gas job growth throughout fiscal year 2017, with the industry supporting more than 308,000 direct jobs. These hard working men and women earned an average of about $127,500 a year – 2.4 times the average pay in other private sectors.

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I was born 'Oilfield Trash' and I'm still proud to be 'OT'

ol' Lawrence in Verhalen


#11612

Sean -

I would be happy to get you an offer on your acreage in Sec. 69 blk 13. Please send me an email at kmckanna@powderrivermp.com and I can get you an offer.

Thanks


#11613

Concho Resources, RSP Permian to combine

Mikaila Adams

Editor-News

Concho Resources Inc., Midland, will acquire RSP Permian Inc. (RSPP) in a $9.5-billion stock transaction to create the largest unconventional shale producer in the Permian basin.

The combined company expects to run the largest drilling program in the Permian with 27 rigs on a combined footprint of more than 640,000 net acres. Included in RSPP’s 92,000 net Permian acres is a 14,000-net acre block of Delaware acreage that Concho sold to Silver Hill in January 2016 (OGJ Online, Jan. 16, 2016).

In fourth-quarter 2017, production on RSPP’s assets totaled 55,500 boe/d on a two-stream basis (80% crude oil, 20% natural gas) and 62,400 boe/d on a three-stream basis (71% oil, 17% NGLs, 12% gas). Concho’s total production was 211,000 boe/d on a two-stream basis (62% oil, 38% gas), according to Cowen & Co. LLC.

“[Concho] states that RSPP will add 5,000 gross locations, increasing its gross location count to 26,000. In RSPP’s latest predeal presentation, it notes 3,980 net locations in the Delaware [and] Midland based on base case well spacing and resource potential of about 2.8 billion boe,” the analysts detailed in a Mar. 28 research note.

Overall, the transaction adds 2.2 billion boe of resource potential, of which more than two-thirds is premium resource, the company said.

RSPP built a high-margin asset portfolio with large, contiguous positions in the core of the Permian, said Concho Chairman and Chief Executive Officer Tim Leach, and “they did so with a strategy of maximizing well performance and returns, which provides substantial running room for continuous development with large-scale projects,” he said.

The consideration will consist of 0.32 of a share of Concho common stock for each share of RSPP common stock. On closing, Concho shareholders will own 74.5% of the combined company, and RSPP shareholders will own 25.5%.

The transaction is expected to be completed in this year’s third quarter. Approved by the boards of both companies, the deal is subject to the approval of both Concho and RSPP shareholders, and the satisfaction of regulatory approvals and customary conditions.

On closing, Concho’s board will be expanded to 11 directors, including one independent member of the RSPP board.

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Concho soon to be biggest player in Reeves/Delaware basin.

ol' Lawrence in Verhalen


#11614

Phase I of EPIC NGL pipeline begins service in Delaware Basin

San Antonio-based EPIC Y Grade Pipeline said last week it has placed into service Phase I of its NGL pipeline from DLK Black River Midstream’s processing plant in Eddy County, N.M., to Delaware Basin Midstream’s terminal in Orla, Reeves county. First product was introduced into the 40-mile segment March 12. Phase II from the Orla terminal through Reeves, Ward, Crane and Upton counties to Benedum is under construction. The pipeline, which is being built beside EPIC’s 700-mile crude oil pipeline, will have multiple origin points in the Delaware and Midland basins and end at a fractionator in Corpus Christi. Bruce Kates, EPIC vice president, said April 2, “The pipeline makes it more efficient, moves it faster, keeps trucks off the highways, and gets the product to where it’s needed to make energy.”
EPIC began construction in December after signing an agreement with BP Energy to anchor the line to the producer’s NGL reserves in the Permian Basin and Eagle Ford to the Gulf Coast. Capacity will be 350,000 barrels per day. EPIC stands for Eagle Ford, Permian, Ingleside and Corpus.

/////Apache's natural gas liquids collection system is to tie into the EPIC

line as well////

ol' Lawrence in Verhalen


#11615

U.S. rig count climbs above 1,000 for first time in three years

For the first time in three years, the U.S. has at least 1,000 active oil and gas rigs, according to Baker Hughes. In the latest report as of April 6, Baker Hughes said there are 1,003 rigs in the U.S. (993 last week), 498 rigs in Texas (496 last week), 90 rigs in New Mexico (87 last week) and 444 in the Permian Basin (443 last week). This time last year, there were 839 in the U.S., 418 in Texas, 51 in New Mexico and 331 in the Permian Basin. The last U.S. count of at least 1,000 was April 2, 2015, with 1,028.

///Reaching levels not seen since 2014, the last mini 'boom' in Reeves county./////

ol' Lawrence in Verhalen