Oil leasing and drilling activity aro...
charles

Longview, TX

#1383 Feb 11, 2012
Does anyone have any information on Triangle Petroleum? A company representative contacted me in regards to top leasing some of my mineral acrage in Williams County, ND. I am not familiar with this operator but from what I've read, they are entering the Bakken at a very aggresive pace. Appears a large part of the company management had prior ties with EOG Resources.
HRJ2

Kansas City, MO

#1384 Feb 11, 2012
Charles wrote:
HRJ2:
You can google Eser.org and put in your township/range/section and it will give you the map of that area showing the current activity.
Thank you Charles! The Eser.org site is how I learned enough to know to ask the question. What I'm looking for is an experienced opinion on the referenced activity. That is, do they ever "skip over" land, picking and choosing every site, as they go? With what I read, they hit 99% of the time, and blanket drill on 1280 acre spacing. So ..., this land would appear to be coming up soon, especially since the lease is comning due soon?
charles

Longview, TX

#1385 Feb 13, 2012
HRJ2:
Operators will skip around in their drilling program mainly due to expiring leases as they try to drill in order to hold the lease and not have to negotiate new leases. In a spacing unit, it only 2 or three small tracts are expiring while the remainder is under lease, they will most likely negotiate new leases on these expiring acreages. Also, sometimes the operator may hold the majority of acreages on a spacing unit and the ones beside it, the majority is held by another company. It is difficult to figure out where these companies will drill next and I've got to the point that when a rig shows up, you might be getting a well. Good luck and if you negotiate a new lease, do your homework and get the current going rates, etc.
Billoutwest

Bend, OR

#1386 Feb 14, 2012
Charles:

Triangle in the past just did leasing and permitting.
Then would have a partner like Slawson do the operations.

Recently they have started their own drilling.

I know there are spacing some in Williams Co., N156/W104,NW of that half township.
charles

Longview, TX

#1387 Feb 14, 2012
Billoutwest:

From what I have learned, Triangle is becoming somewhat of an aggressive player in this area as they purchased their own completion completion company. In my area, they are in the process of top leasing acreage as Empire Oil Company (a lease broker) still maintains a chunck of this area along with Marathon. I understand that it is the intentions of Triangle to drill this area and I know that Slawson, who was also a lease holder in the area, has assigned their leasehold to Triangle. Currently, I'm in the process of negotiating a top lease but I have set my terms and if nothing else, will allow the minerals to expire and then continue negotiations. Of course, if a well is drilled, this will end the process. There are alot of factors which could play into this scenerio as Triangle will most likely be paying a 23-25% royalty on the companies who assign leaseholds to them. This may get interesting over the next couple of months.
Billoutwest

Bend, OR

#1388 Feb 14, 2012
"On March 4, 2011, Triangle entered into a separate agreement (the "Slawson Agreement") with Slawson Exploration Inc., a privately held Kansas corporation ("Slawson"), to acquire certain
assets of Slawson. The assets include certain oil and natural gas leases located in Williams County, North Dakota, comprised of approximately 6,700 undeveloped net acres. The aggregate consideration, subject to customary purchase price adjustments, is comprised of approximately $14.5 million in cash and approximately one million shares of Triangle's common stock. Triangle is currently the minority working interest owner and Slawson is the majority working interest owner on approximately 1,600 of these net acres in Williams County, North Dakota. Those net acres are subject to Triangle's previously disclosed Slawson participation agreement. As a result of the Slawson Acquisition, Triangle will assume operations on that acreage. The closing, which is subject to customary conditions, is scheduled to occur on April 1, 2011."

From almost a year ago but it does show Triangle being more aggressive.
charles

Longview, TX

#1389 Feb 15, 2012
Billoutwest:

Sorry but I am just now reading your post as this site doesn't alert me to new posts. Interesting information on the Triangle/Slawson deal and as I said earlier, I am currently dealing with them on a top lease for my minerals in Williams County. I have popped some figures and terms to them via a broker just to see how serious they are in this business. I do believe that they are serious about drilling this area but currently, they have only two rigs operating and I think they are chasing expiring leases to the best of their ability. Since they have acquired their own completion company, the completion work is moving along with these drills. I look for them to possibly add another rig by the end of this year but the clock keeps running on these expiring leases thus their actions to maintain leaseholds is to top lease within a 6 -8 month window. I also have a lease expiring in July of this year in Williams which is currently permitted by Marathon so I look to either hear from Marathon in regards to a lease extension or a rig will show up on location in the next couple of months. When this ND show is over, my attention will turn to MT but I'll have about 2 years before they start to expire. How about your mineral areas?
Anne

Sparta, WI

#1390 Feb 17, 2012
Have a well that is in tight hole until the end of April. My question is if they would "choke" the well, do they do that at all during the 6 months of tight hole or after it comes off the list?
kennedy 817

North Richland Hills, TX

#1391 Feb 18, 2012
Anne, most new wells must be choked because it would be dificult to deal with the initial rush of oil, water and gas. You can get thousands of barrels of water and oil in a day out of a 3/4 inch ckoke. From what I understand it also is beneficial to the total return over the life of the well to slow it down.
mark

Geneseo, IL

#1392 Feb 19, 2012
My wife and I own 80 acres of minerals in McKenzie Co. North Dakota. These minerals are located close to the Montrail Co. line, two of the most productive counties in North Dakota. I was looking to sell these acres and wanted to know what would be a fair price. Recently two permits were issue to Marathon Oil to start drilling. From my experience with Marathon we will probably be getting royalities by the end of this year. I tried to sell them on E-bay for one million dollars but had no interest. Not enough advertising. Thanks
Anne

Sparta, WI

#1393 Feb 19, 2012
kennedy 817 wrote:
Anne, most new wells must be choked because it would be dificult to deal with the initial rush of oil, water and gas. You can get thousands of barrels of water and oil in a day out of a 3/4 inch ckoke. From what I understand it also is beneficial to the total return over the life of the well to slow it down.
Thank you Kennedy 817! That was very helpful.
Kennedy 817

North Richland Hills, TX

#1394 Feb 19, 2012
Mark,$1,000,000 is pretty steep even between operators for 80 acres, and if you had them leased, I would consider their value halved or more right from the start, because the purchaser could not participate in the well and collect 100% royalty. If you are leased you have already conveyed 100% of the gas and oil underground for the bonus price and now only posess a royalty interest in production. Why would anyone give you a huge amount for at most the entitlement to 23% of your oil and gas ? Leased at 20% it might take 15 years or more to break even, and possibly never. I have acres in NE McKenzie myself and just pulling out numbers that sound right to me I would say you might have gotten $7,500 to $9,000 unleased and possibly $2,500 to $3,500 leased, depending on your exact location and how the nearest wells have done and how fantastic a lease you negotiated. Just out of curiosity, are you leased and if so, what royalty % did you get ? Also if you are that sure of your minerals and are unleased, consider being a carried interest. I also have those acres I spoke about before, I would sell you for $12.5k each, if you feel you need more and think they are worth that much, they are unleased.
Kennedy 817

North Richland Hills, TX

#1395 Feb 19, 2012
Mark, I think you asked a little too much, if the acres were unleased and alot too much if they are subject to a lease. If you are leased you own 0% of the oil and gas, you conveyed all of it for the signing bonus and a promise of future royalty on any production, with merely the chance of reversion if the lease expires with no production, or when production ceases sometime in the future when the recoverable gas and oil are gone anyway. If marathon plunks a well on your acres and holds them by production with a lease you executed, you would not be selling 100% of the oil/gas to a purchaser, but the royalty you retained, whatever % that was. If you are leased I hope you get a good well and enjoy the royalty.
Kennedy 817

North Richland Hills, TX

#1396 Feb 19, 2012
Darn post didn't show up so I abbreviated the second post if perchance it shows up also. In any case, good luck!
mark

Geneseo, IL

#1397 Feb 20, 2012
The acres we have are leased thru another oil co., but I figured they parnered with Marathon because they are the biggest property holders in this area. We got 18 % on our lease, and it is located in section 31, township 152, range 93, NE 1/4. We own 1/2 of this quarter. We also own 80 acres in section 29 just northeast of section 31 and we have been recieving $6500 per month before taxes.$80000 per year. This well has been producing for 1 year now, with a pretty steady monthly income. What do you mean when you said a million was a little to high? Marathon has been issued two permits for this pool of land sections 30 and 31 and if they get the same kind of production from these two wells with the probably a third well in the future. Two wells would be $160,000 a year X 6.25 years = 1 million plus any future wells. Thanks for your reply. My wife and I both have health issues and thought this would help with some of the medical expenses. Thanks again.
charles

Longview, TX

#1398 Feb 20, 2012
Mark:
I think one factor you may not be considering, is the decline in production over the life of a well. I have no specific figures for you, but all wells generally start a decline in production over the first year, some more drastic than others. You are correct that a steady income will be available but it is hard to make long range projections on wells as seveal factors arise. One, is the price of oil going to remain in the current range or will the price drop as it has in the past from a "boom" era. Second, the production decline factor will be real and just how bad it will be is somewhat an unknown factor. I have witnessed two "highs" and "lows" in this industry in my life and I'm not 60 yet. Each individual mineral owner has to make their own decisions and I've seen some win while I've seen others not so lucky. Best thing is do extensive research on this matter and try your best to make educated decisions based on these findings. I will agree, if you have an interst in selling, now is a great time while prices are at $100 + a barrel. Good luck and hope your decision is a good one.
S Ward

League City, TX

#1399 Feb 21, 2012
Have 160 acres(minerals) in Mountrail County ND. At 151,90,24,nw 1/4.Current lease expires 4/7/12.Looking for new lease with co. that would drill. Information on current bonus,royalty,length would be most welcome.Received inquire to top lease from management co.Would prefer to go with driller.All of you knowledgeable people regarding above requested information you have my sincere thanks for any upcoming information.
charles

Pittsburg, TX

#1400 Feb 21, 2012
S Ward:

I can insert my opinion on several areas of your questions. The current royalty is 20%(I would not consider anything less). The maximum lenth would be 3 years with no extension. I cannot inform you about the current bonus for this area but it should be well over $2000/acre. I have found that top leasing is at a high in the western ND areas. In many cases, the operator has hired a lease broker to handle the leasing matters thus you might be dealing with a brokerage firm instead of the operator directly. I would advise to let your minerals expire and not top lease. When they expire, you have much more negotiating power and by all means, don't take the first offer. Your minerals are located in a "hot" area and you are in a good position to negotiate a great lease. Good luck.
Kennedy 817

North Richland Hills, TX

#1401 Feb 21, 2012
Mark, 3 to 5 years production is the standard for buying wells that are already drilled, then they discount that. What if production drops faster than expected ?- 10% What if the price of oil drops ?-10% and so on. The point is that the buyer is going to do everything he can to make sure that he makes a profit. Mark, your well has been remarkably stable for the first year, and I think that is because Marathon is conserving pressure to assure the greatest long term return. Your well has only produced 82k barrels in a year, many wells do better than that. The pressure is going away, albeit slowly in the case of your well, but I hope you won't be shocked if your wells production fall by 1/3 to 1/2 in another year. I am truly sorry to hear of your and your wifes health issues and I wish you all the best.
S Ward

League City, TX

#1402 Feb 21, 2012
Charles, thank you very much for responding. Looking forward to a geat lease.

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