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oil exploration

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Hereford76

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i was curious to know how to learn more about potential oil/gas exploration. a family member has been approached to do seismic exploration on his property but no one has a clue about all this. anyone have direct experience or advice or information resources?
 

bgc

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I dont have any clue about the exploration other than I wish they would find oil on my place. One word of caution: make sure that family member own the mineral rights to their property. Sometimes people bought property and the mineral rights were never transferred.
 

Wyoming Wind

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bgc said:
. One word of caution: make sure that family member own the mineral rights to their property. Sometimes people bought property and the mineral rights were never transferred.
Exactly what I was going to say...or talk to the person who does have the mineral rights on your land. You can get really up a creek without a paddle if you don't have the rights---an oil company/gas company can disturb/ruin the surface of the land and you have nothing to say. Call some of the communities in north dakota where the Bakken formation is located---there have been some major problems with ranchers who didn't have mineral rights up there.
 
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Anonymous

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We've got some pieces of land that they've had the mineral leases on since the early 50's- except for a few years in the late 90's.... They've been great to work with- and they try to work around doing any surface damage but if they do they pay right up for it....
Back in the 50's they drilled on one site- but capped it off... Now they are drilling a well about 10 miles from that site near another old drill site that had been capped back in the 50's on the Cornwell Ranch....According to what the drillers are saying is that they found good results in the 50's- but not good enough to make a cost effective producer at that time- but now with angle drilling and fracking techniques they have they think they can...
I'm hoping they do- and just keep bringing in rigs... :)

Like Lee Cornwell said in this weeks newspaper article- those lease payments they've been paid for all those years have been just like getting a break on their fuel bills...Go to the post office every year and pick up your check :) .... Most leases around here have been for 5 years- with the right to renew at same price for 2 years- and then they are back open for negotiation...A lot of leases come open next year- and I'm thinking the bids may be quite a bit higher since they have now decided that we are over the Bakken field- and more natural gas is being used...

Also right now I heard the state is letting leases on a lot of State Land...We have lots of gas wells in this area too- and I understand that is expanding.... The Northern Border gas pipeline runs right thru the county- and if the greeny weenies and the "not in my back yard" folks (which includes several farmer/ranchers) don't get their way- the XL oil pipeline will be going thru the county too....
 

Wyoming Wind

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One last thing...remember the oil/gas companies have ALOT of money---make sure they make it worth your time. And find out if they are exploring neighboring lands too. The companies know a lot more about what could potentially be under the ground than they will initially tell you about. And if they find some good stuff, get a good lawyer!
 
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Wyoming Wind said:
One last thing...remember the oil/gas companies have ALOT of money---make sure they make it worth your time. And find out if they are exploring neighboring lands too. The companies know a lot more about what could potentially be under the ground than they will initially tell you about. And if they find some good stuff, get a good lawyer!

When they came back in leasing after being out for a few years- several of us went together and got an attorney to go over the lease they were offering- and to make sure the price was comparable across the board for each area and they weren't trying to put the screws to anyone...And to know that the lease covered our rears- since most the leasing outfits resell the leases....

But the leasing outfits were great to work with...They worked it around so they met your schedule- and did all the legwork and paperwork...
 

WVGenetics

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I am certain things are different out there but right now we have major oil and natural gas exploration/drilling going on in WV and the Appalachian region in the Marcellus shale formation. Oil/Gas companies can be very difficult to deal with (not always) in my experience; however it is best to deal with them directly rather than a middle mad leasing agent or company that just wants to gather large tracts of acreage and re-lease them directly to companies actually doing the drilling. You give up dollars. These things can definitely be lucrative for landowners but you must be careful, have a good lawyer that understands the verbage of these types of lease agreements, and above all make sure you are protected as a surface owner, especially with regard to your water resources. Just as an example, about 3-4 years ago many leasing companies came through our area and leased a lot of ground for drilling in the Marcellus shale for natural gas paying around $5-150 per acre for a 5 year lease before anybody really new the value of the Marcellus. Currently, leases are going for 2000 - 5000 per acre depending on the size of the tract and some have been reported up to $14000 an acre with up to an 18% royalty on the gas produced. It is big money!!! Heard about one man getting a royalty check in excess of $100,000 a month! The thing they got a lot of people early on around here is the leases were written to include all "hydrocarbons", water, minerals, coal, etc., basically anything of value and not specifically the Marcellus. So make sure your lease specifies exactly what they want and only that. Make them get another lease for another resource. Finally, if your lawyer understands tax law the lease payments you receive can be counted on your taxes in such a way, maybe supplemental income rather than ordinary income-not real sure on that one, that you only have to pay base rate income taxes. By the way, I can get you a copy of a very favorable landowner lease if you would like.
 

littlejoe

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In the late 90's it was pretty dry, we were buying $100 hay and hauling some cows 200 miles for grass.

Got sick of that project and sold half the cows. Knew a broker we trusted who was former mining engineer. We got interested in commodities--oil, gas, metals, uranium. Broker liked Canadian co's, thought they were better buys and also a currency play. He liked little co's--jr's---as the right one could be explosive, growth wise. But way more risk.

So--we got to doing that and did a lot of traveling to meet the people and see the plays---try to limit the risk, 'eh? (ya, i spent so much time up there, got to talking like them~)

This turned into a real kick in the pants---guys running these deals, many of them have kinda a 'prospector/cowboy' mentality and are great folks. We're ahead of the game--money wise and experience wise both. Couple weeks ago, I flew over the grand canyon in jet ranger to stake claims outa Prescott, Az. Today, dealing with a guy interesting in furnishing specialty tools in n central mt.

Anyhow---seismic and or drilling---you oughta be entitled to surface damages, access rights $$ whether you got the minerals or not. People with minerals in glacier, toole, pondera, teton or L & C county are welcome to inbox me----I am kinda a (quite loosely-- :wink: ) affiliated 'agent' re land mineral leasing. In all honesty, I've been dragging my feet because I don't want to present my friends and neighbors with what I consider '60's prices.

On the N Dak Bakken: this is not a new discovery. They knew it was there. The tech did not exist to make it work, economically. If that's what they're into on blackfeet res, they've moved the boundary west 500+ miles!

Costs: I'm involved in a viking play outa kindersley, sask. Been drilled since the 50's or so. Very well defined field. Wells are not even logged--drill, run pipe, frac, complete. 800m vertical, about 1000m horizontal leg. Total days per well: about 5. Wanta know what it costs? 1.2mm$$.

Now, at some of the prices I've heard offered---granted, a long ways from any production, but they like it for some reason---this same 1.2 would tie up 100,000 acres. I think it's too cheap.
 

sweetbasil

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Hereford76 said:
i was curious to know how to learn more about potential oil/gas exploration. a family member has been approached to do seismic exploration on his property but no one has a clue about all this. anyone have direct experience or advice or information resources?

Some resources for you to read...
http://www.etechinternational.org/new_pdfs/lessImpact/AttAoverview.pdf

http://www.ohiodnr.com/oil/oil_landowner/tabid/17732/Default.aspx

http://www.articlesnatch.com/Article/Oil-And-Gas-Lease--What-You-Should-Remember-Before-You-Sign/1420250

http://www.ag.ny.gov/bureaus/consumer_frauds/oil_gas.html
(Even though these file are from the state of NY, the oil and gas leases are similar in many aspects)

http://www.mineralrightsforum.com/forum/topics/oil-and-gas-leases-in-montana?xg_source=activity
 

Hiker1

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The most important thing is to protect your water supply. Make sure there is language in the permit to the effect that if anything should happen to your water wells, etc. while they are shooting the project, that they will replace them. Seismic has ruined more water wells than anything else.

Is is a 2D or 3D project? Is it a vibe or shot hole?

Depending on the time of year, be prepared for a lot of damage. And be prepared to babysit the crews. They are notorious for cutting fences and leaving gates open, among other things.
 
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