I would also be interested what part of Arapahoe County you are in. We have recieved an offer from Upstream, we are in Arapahoe County, roughly 7 miles South of Bennett. Thanks.
Ted Preston said:
Lisa and Nicole, I have a client who is trying to assess his mineral value in Arapahoe COunty. Would you mind sharing where your minerals lie in Arapahoe County, so we can better understand the vicinity where the landmen are paying these rates?
Thanks in advance!
Nicole Bartley said:
We signed with GFL, $1000/20%/3 year with 3 year extension at $1500 per net mineral acre. It was a collective agreement by 7 people in the neighborhood, all with at least 25% mineral rights, all with 40 acres, all surface owners. The representative for GFL said they wouldn’t be making any more offers like that, but who knows. TransContinent did tell us that they were no longer interested but they had just been outbid by GFL on 5 of those 7 neighbors. Don’t know if that helps at all… Lisa said:
Hey Nicole, I was just curious as to whether you’ve signed a lease yet? If so, would you mind sharing who you signed with and what the terms were? It looks like we’ve got the same companies making offers, except that we have GFL vs. Samuel. Our neighborhood hired a landman to further market the rights, as well as negotiating the lease and surface use agreement. Hopefully we’ll get it wrapped up soon.
Nicole Bartley said:
I’m in Arapahoe County as well, I’m thinking Lisa is my neighbor at the end of the road We are currently at $700/20%/5 year term - thinking we’d better sign soon. But if Weld County is that hot, I would also think that $200 is low.
Theres alot of us that are getting offers.Without a attorney you may fall victim to a bad deal.Oil companies will always find a problem with the mineral rights that you own.From title issues to fractional ownerships.As a excuse to make you feal that what you have is second best…Oil companies,just like the middle man,are looking to steal a deal from you!! Over any issue!!! Theres alot of you that have signed these 1/8 royality deals with a next to nothing lease aggrement.Oil companies by law can offer this,the lowest amount there is.Then theres the other deal, that oil companies would love you to sign.That would be the contract that they can go back on and change anything they want including the royality rate. Stop,stop,stop that!!! Thats what i have to say about that.Remember if your getting signed with this nasty deal.You at the same time could be getting the fair deal your intitled to!!Now remember this…if a company is willing to sign you with the 1/8th deal.Then does that not show that what you own is good? So dont do it.Now for the people that have already have signed deals like this.At most because they didnt know,or over wanting money now…This has set so far a bad trend of a whole lot of bad offers to lots of people with mineral rights all over.This has created a off price market for all of us in holding,while oil companies are paying up to 3200 dollars per acre for state lands.Does that sound fair to you?Take the stand!! Buy doing this in time you will get the deal that your intitled to.It will happen if all of us stand firm. Thanks…Paul Power
Speaking to our independent landman today, he says the going rate right now in Weld County is $2700. Now if that’s the whole county or not, I can’t say. Clearly that is definitely the case around Jake and all the other hot wells. We are on the very southern edge of the play in Arapahoe County, and just completed our deal for $1000 per acre, 20% no cost royalty, 3 and 2 term, and no surface use allowed.
I have the rights to 320 mineral acres in Weld County and believe them to be in 11N 56 or 57W. Has anyone leased or heard of offers in the area? These are available and would like to get a fair deal. Thanks in advance, ZK.
One observation–there have yet to be any permits issued or pending in Weld County east of Township 60. There are very few east of Township 62. So, I’d venture to guess that the eastern part of the county is not yet fetching $2700. I could very well be wrong however!
Lisa said:
Speaking to our independent landman today, he says the going rate right now in Weld County is $2700. Now if that’s the whole county or not, I can’t say. Clearly that is definitely the case around Jake and all the other hot wells. We are on the very southern edge of the play in Arapahoe County, and just completed our deal for $1000 per acre, 20% no cost royalty, 3 and 2 term, and no surface use allowed.
Whoops, meant to say “range” rather than township.
Lisa said:
One observation–there have yet to be any permits issued or pending in Weld County east of Township 60. There are very few east of Township 62. So, I’d venture to guess that the eastern part of the county is not yet fetching $2700. I could very well be wrong however!
Lisa said:
Speaking to our independent landman today, he says the going rate right now in Weld County is $2700. Now if that’s the whole county or not, I can’t say. Clearly that is definitely the case around Jake and all the other hot wells. We are on the very southern edge of the play in Arapahoe County, and just completed our deal for $1000 per acre, 20% no cost royalty, 3 and 2 term, and no surface use allowed.
Has anyone heard the latest on Jake? Their silent period should be up. Does anyone know what their production is? Did it stay high or did it drop off? How about new wells? Anyone heard about any other horizontal wells drilled and whether they were successful?
If you go to the COGCC website, they’ve got info for Jake through the month of June. I think that would be considered current? Back in March Jake produced over 11,000 barrels in 16 days, and in June it was about 3400 in 26 days. Clearly that is a drop-off, but maybe it’s severely restricted or something? I don’t know how that all works. Just from googling a few days ago, it sounds like there have been many wells similar to Jake drilled. So, everybody still seems pretty optimistic.
Smith said:
Has anyone heard the latest on Jake? Their silent period should be up. Does anyone know what their production is? Did it stay high or did it drop off? How about new wells? Anyone heard about any other horizontal wells drilled and whether they were successful?
Ted, that is comforting to hear–a large reduction doesn’t mean the well is a bust. Do you know why it is that some months a well is in production for say 16 days, and other times the whole month? Is it just part of managing the pressure? Or is it related to oil prices? Something else?
Ted Preston said:
I have no actual knowledge of the production for the Jake well, but you should expect that it will drop off substantially. It will drop off because the oil company will not want to waste the pressure in the formation simply to produce large amounts of oil from a single well quickly. Oil companies take a longer view, and they understand that the pressure in the formation that helps the well produce so prolifically, also helps ALL the wells drilled into the same formation later produce oil. If they waste that pressure by producing a huge natural flow from the Jake Well, they will ultimately get less oil from the larger pool. They try to manage reservoir pressures to help produce the maximum quantity of oil from any given pool before they need to start looking at CO2 injection or other enhanced recovery techniques.
Smith said:
Has anyone heard the latest on Jake? Their silent period should be up. Does anyone know what their production is? Did it stay high or did it drop off? How about new wells? Anyone heard about any other horizontal wells drilled and whether they were successful?
I didn’t see anything about Jake specificlly on their Q2 Conference Call but here is an excertp from the conference call in regards to the 2 new wells completed and producing in Weld County.
We also have some new data on our Colorado Niobrara play. We’ve completed two additional wells, the Critter Creek #02-03H and #04-09H, and they’re producing at managed restricted rates of 570 and 600 barrels of oil per day, respectively. We have 100% working interest here. We have four rigs running in this play. But as we’ve previously stated, we want to observe production from these and earlier wells until year end, before we make a reserve estimate because the reservoir is heavily fractured.
They have restricted production on all the wells it seems to get a feel for the area.
Ted Preston said:
Smith said:
Has anyone heard the latest on Jake? Their silent period should be up. Does anyone know what their production is? Did it stay high or did it drop off? How about new wells? Anyone heard about any other horizontal wells drilled and whether they were successful?
According to their second quarter conference call, EOG's Jake and Elmer wells produced around 50,000 barrels during the first six months, and are now "stabilizing at about 150 barrels of oil per day."
150 barrels a day seems disappointing. That’s what they were getting from vertical wells, which cost less and they can put more on less acreage. Yet the EOG guys say “We don’t want to proclaim victory but we’re getting a little more positive feeling than we had three months ago, particularly in observation of the Jake and Elmer wells, since those wells have a little longer line.” Any thoughts on this?
Ted Preston said:
Smith said:
Has anyone heard the latest on Jake? Their silent period should be up. Does anyone know what their production is? Did it stay high or did it drop off? How about new wells? Anyone heard about any other horizontal wells drilled and whether they were successful?
According to their second quarter conference call, EOG's Jake and Elmer wells produced around 50,000 barrels during the first six months, and are now "stabilizing at about 150 barrels of oil per day."
Great insights. Thanks. Do you think they control the output at 150 barrels because of the pressures you metioned earlier? Or is that just a natural flow at this point? Also, tell the forum members more about your background – landman, lawyer, other? You clearly have an in depth knowledge.
Ted Preston said:
Ted Preston said:
Yep! I think I’d love to have two oil wells stabilizing at 150 barrels per day. That’s $10,000 per day in income, from each well. At that rate, you pay off the drilling costs in the first year of production, and after that, gravy.
Actually, I realize that I should revise my payoff calculation, based on Mark Papa's suggestion on the analyst call that the Jake and Elmer wells produced 50,000 barrels in the first six months, and that they are stablizing at 150 BOPD. That means the wells paid their drilling cost in the first six months, and then produce 3.5 million a year after that time. So the wells could potentially be paid off and showing a profit after only six months.
It was 50,000 in the first 90 days, not 6 months. The information previously stated was incorrect. There was also not any information about Jake or Elmer in the Q2 report from EOG. If you go to the Colorado Oil and Conservation site you can see all the production for Jake and please make not of the # of days each month it was producing when looking at the barrels per day.
Ted Preston said:
Ted Preston said:
Yep! I think I’d love to have two oil wells stabilizing at 150 barrels per day. That’s $10,000 per day in income, from each well. At that rate, you pay off the drilling costs in the first year of production, and after that, gravy.
Actually, I realize that I should revise my payoff calculation, based on Mark Papa's suggestion on the analyst call that the Jake and Elmer wells produced 50,000 barrels in the first six months, and that they are stablizing at 150 BOPD. That means the wells paid their drilling cost in the first six months, and then produce 3.5 million a year after that time. So the wells could potentially be paid off and showing a profit after only six months.
I think I will once again will step in here to clarify a few things. I first would like to say the Jake made 50,000 BO as stated in about 3 months. That means EOG if they have a 15% lease received 42,500 and the mineral owner got the rest. EOG spent 4 million on this well. 42500 x 70.00/BO = 2.975 million. Now the well is at 150 barrels in very little time. This is called decline and that is frankly a horrific decline rate. Stabilized at 150 is nonsense. All wells go through 3 phases of decline and if it is in the second stage at 150 BOPD it is going to drop from that fast also. I would bet in under one year it is at 40 or less. At that time it will then be in the 3rd decline phase which is a slower decline than the first two. That is the unnown here but I can tell you that a well that cost 4 million and is at 40 barrels in one year is no big winner and you can expect to see lease interests fall like a rock unless better results from other wells nearby come in fast. Do the math, of the 2.975 million EOG still has to deduct Colorado State Severance tax of 5% = about 2.8 million - still 1.2 million short of returning the well’s cost. 150 BOPD = about 8400.00/day to EOG. 1.2 million / 8400 = 5 months at 150 BOPD just to pay back the well. Any decline in 5 months and it gets longer and longer. Clearly this is not good news for anyone. If you wouldlike to have a 150 BOPD then go plop down 4 million and drill your minerals, first assign 15% royalty to your favorite charity and then also pay them 500.00/acre also on 640 acres needed to drill. then risk your 4 million on a well that the nearest producer is at 150 BOPD 6 monthsinto the production life and you can see what EOG is thinking begore they lease or drill again. This is not good news for mineral owners or oil companies and you will see leasing action greatly slow and offers greatly reduced for minerals if any keep coming at all. That is bottom line accounting and that is what drives all this activity whether we like it or not. I warned everyone holding weeks ago out for more money and royalty not be greedy or you may end up needy.
Regarding this wells pressures they are producing all they can from a horizontal well and pressure maintenance is only employed in certain geological traps like anticlines and stratigraphic traps, not in horizontal oil wells that are self sourcing reservoirs.
Good luck to all…
Angie Dennis said:
It was 50,000 in the first 90 days, not 6 months. The information previously stated was incorrect. There was also not any information about Jake or Elmer in the Q2 report from EOG. If you go to the Colorado Oil and Conservation site you can see all the production for Jake and please make not of the # of days each month it was producing when looking at the barrels per day.
Ted Preston said:
Ted Preston said:
Yep! I think I’d love to have two oil wells stabilizing at 150 barrels per day. That’s $10,000 per day in income, from each well. At that rate, you pay off the drilling costs in the first year of production, and after that, gravy.
Actually, I realize that I should revise my payoff calculation, based on Mark Papa's suggestion on the analyst call that the Jake and Elmer wells produced 50,000 barrels in the first six months, and that they are stablizing at 150 BOPD. That means the wells paid their drilling cost in the first six months, and then produce 3.5 million a year after that time. So the wells could potentially be paid off and showing a profit after only six months.
Ted, if you go to the Colorado Oil and Gas website and look up the Jake well you can see the numbers for 2009 and for 2010 though June. It’s very clear that it’s 50,000 over 3 months. However, Mark Papa did state he thought it was over 6 months, but if you read the statement he was not sure of his information. I am posting the statement below.
Also, one last observation, Mark is saying seems to be stabilizing at 150 barrels per day, however if you look at the Colorado Oil and Gas website the numbers are larger than 150.
Just a follow-up on the two Critter Creek wells, so just to confirm, you stimulated both those wells?
Mark Papa
Yes. They were stage frac-ed and the exact methodology of the stage frac is kind of what we’re experimenting with. Since the Niobrara seems to be of some interest to everybody, I mean we’ll give you a little more color on the – the Jake and Elmer wells appeared to be kind of stabilizing each at about 150 barrels of oil per day. And of course, remember that the first six months, they had pretty significant production, I think, 50,000 barrels or so in the first six months or whatever. So I’d say, overall, we’re still cautious. We don’t want to proclaim victory but we’re getting a little more positive feeling than we had three months ago, particularly in observation of the Jake and Elmer wells, since those wells have a little longer line. But it’s almost an issue of, okay, is this going to be, as Loren said, a very large oil reserve accumulation? Or is this going to be a more moderate size oil reserve accumulation? That’s kind of the where we stand today on the overall play.
Ted, I have no intention of offending anyone and certainly I am not accusing anyone at EOG of anything except telling it in their honest opinion. What I said is that the Jake has a steep decline rate, period. I also said 50,000 BO was prodcued in 3 months and it was. I would get a subscription to some of the production reporting services and you will have this information or check the Colorado website for free. I also said 50,000 BO does not come close to paying the Jake well off and explained why and it does not. I said the decline is rapid and it is. I also said it better stabilize or lease prices and interest will diminsh and they will in that area. Those are not accusations of deceit, they are just cold, hard facts.
I am seeing people post on here telling that $2500.00 is the going rate for leases in Weld County and it is not. It is the going rate in an area in or nearby the Wattenburg field (and a limited few other areas) which is a gigantic and hugely productive field with multiple pay zones. No leases in most areas of Weld are worth near that amount and will not be unless both very good and lots of wells are drilled in those areas to prove the Niobrara. Farther east of I-25 you go the less and less leases are worth, unless they are adjacent a D or J sand discovery well which is not the Niobrara formation.
I stand exactly where I said I did. Clarifying facts only to help people make good decisions. I try to provide input for minerals based on facts not exhuberance. I think oil and gas questions should be answered by oil and gas professionals and people with questions should seek out oil and gas professionals so they get accurate advice.
Again, I hope all do great and I wish EOG all success with their endeavors as they are helping supply the energy we need, providing employment and paying royalties to many farmers and others who need the money desperately including the great State of Colorado. So I say “GO JAKE WELL GO!” But I also say if it keeps declining something new better happen as to frac desings or horizontal drilling techniques or this mesage board may get depressing.
Everything I state on here is my own opinion and if you want a professional geological review of your area there are many consulting geologists who will prepare one for you for a fee which would be wise if you have very many minerals for lease. This ensures owners the best deal possible and they know better what you may have as to oil possibilities. They can also help you contact companies for leasing.
Good wells to all and may your lease prices go higher!
Ted Preston said:
Bryan said:
I think I will once again will step in here to clarify a few things. I first would like to say the Jake made 50,000 BO as stated in about 3 months.
Bryan, as long as you're clarifying things, perhaps you can clarify the source of your information. On a quarterly earnings conference call, Mark Papa, CEO of EOG Resources, stated that the well made 50,000 barrels in the first six months, and that it is stabilizing at 150 BOPD. You seem to have some source of different information, telling you that the well made 50,000 barrels in the first three months, and that it is not stabilizing. You seem to be suggesting that Papa's statement on the earnings call was materially false, or at least misleading. If that's not what you mean, please clarify.
So sorry to just be getting back. I am about 5 miles southeast of Watkins. Incidently, I received my check yesterday
Cathy said:
I would also be interested what part of Arapahoe County you are in. We have recieved an offer from Upstream, we are in Arapahoe County, roughly 7 miles South of Bennett. Thanks.
Ted Preston said:
Lisa and Nicole, I have a client who is trying to assess his mineral value in Arapahoe COunty. Would you mind sharing where your minerals lie in Arapahoe County, so we can better understand the vicinity where the landmen are paying these rates?
Thanks in advance!
Nicole Bartley said:
We signed with GFL, $1000/20%/3 year with 3 year extension at $1500 per net mineral acre. It was a collective agreement by 7 people in the neighborhood, all with at least 25% mineral rights, all with 40 acres, all surface owners. The representative for GFL said they wouldn’t be making any more offers like that, but who knows. TransContinent did tell us that they were no longer interested but they had just been outbid by GFL on 5 of those 7 neighbors. Don’t know if that helps at all…
Thanks Nicole. Are you in the area behind Tom Bay Road? I heard there was some activity there. Glad to hear you have check in hand, how was GFL to work with? Thanks - Cathy
Nicole Bartley said:
So sorry to just be getting back. I am about 5 miles southeast of Watkins. Incidently, I received my check yesterday
Cathy said:
I would also be interested what part of Arapahoe County you are in. We have recieved an offer from Upstream, we are in Arapahoe County, roughly 7 miles South of Bennett. Thanks.
Ted Preston said:
Lisa and Nicole, I have a client who is trying to assess his mineral value in Arapahoe COunty. Would you mind sharing where your minerals lie in Arapahoe County, so we can better understand the vicinity where the landmen are paying these rates?
Thanks in advance!
Nicole Bartley said:
We signed with GFL, $1000/20%/3 year with 3 year extension at $1500 per net mineral acre. It was a collective agreement by 7 people in the neighborhood, all with at least 25% mineral rights, all with 40 acres, all surface owners. The representative for GFL said they wouldn’t be making any more offers like that, but who knows. TransContinent did tell us that they were no longer interested but they had just been outbid by GFL on 5 of those 7 neighbors. Don’t know if that helps at all…
We’re west of Box Elder Creek rather than east. GFL was okay, the landman didn’t seem particularly knowledgeable.
Cathy said:
Thanks Nicole. Are you in the area behind Tom Bay Road? I heard there was some activity there. Glad to hear you have check in hand, how was GFL to work with? Thanks - Cathy
Nicole Bartley said:
So sorry to just be getting back. I am about 5 miles southeast of Watkins. Incidently, I received my check yesterday
Cathy said:
I would also be interested what part of Arapahoe County you are in. We have recieved an offer from Upstream, we are in Arapahoe County, roughly 7 miles South of Bennett. Thanks.
Ted Preston said:
Lisa and Nicole, I have a client who is trying to assess his mineral value in Arapahoe COunty. Would you mind sharing where your minerals lie in Arapahoe County, so we can better understand the vicinity where the landmen are paying these rates?
Thanks in advance!
Nicole Bartley said:
We signed with GFL, $1000/20%/3 year with 3 year extension at $1500 per net mineral acre. It was a collective agreement by 7 people in the neighborhood, all with at least 25% mineral rights, all with 40 acres, all surface owners. The representative for GFL said they wouldn’t be making any more offers like that, but who knows. TransContinent did tell us that they were no longer interested but they had just been outbid by GFL on 5 of those 7 neighbors. Don’t know if that helps at all…
We are currently at $700/20%/5 year term - thinking we’d better sign soon. But if Weld County is that hot, I would also think that $200 is low.