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Eastern Oregon Units opening up - Land Man offering $20 & 12.5% Please help!

  • 38 Replies
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mohawk70

  • 10592
Excellent info. from everyone.  Much appreciated.  Some of the neighbors with larger acreages aren't looking into things at all.  Ran into one today at lunch; he was offered $10 per acre and says if they want to pay him for "that" ground that he'll just take it.  That doesn't help the cause for the rest of us.


NO IDEA what the shale characteristics are in Oregon.    Maybe check with www.pgjonline.com 

The folks at the geology dept at Penn State University were fabulously helpful in Pennsylvania; maybe there are some folks at Oregon State University's geology dept or in adjacent states' universities who have some familiarity with your local geology.


HOWEVER, in Pennsylvania five years ago, the initial offers were $50 or less ... and with assistance from knowledgable attorneys and other agents and helpers & competitive "bidding", they peaked around $5750 for five years, 20% no deductions.   

So, theoretically, the potential is very "open" ... no telling at all at this point ... very fluid ... market forces ... supply & demand ... pipeline access ... return of manufacturing to the U.S.A. from overseas ... plastics & fertilizers, etc. 

If it takes too long to construct an LNG liquefaction plant [ five years] for the export market ... then maybe manufacture plastics and chemicals and export those.

« Last Edit: May 15, 2013, 08:21:26 AM by mohawk70 »
Please remember:  The planet Earth is a VOLCANO.   You cannot "save" a volcano ... and volcanoes do not NEED to be saved.

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mohawk70

  • 10592
This link covers about all the known shale locations and formations; might be able to find something for your area:

http://www.oilshalegas.com/shalefields.html

http://www.oilshalegas.com/bakkenshale.html

http://www.oilshalegas.com/woodfordshale.html

Buttons along the edge are helpful.


Interesting that Oregon doesn't show up.

So, what do the landsmen know that we don't know?   Hmmm???


Chainman shale is "just" south of you:

http://www.oilshalegas.com/chainmanshale.html


And Horn River and Cardium are "just" north of you:

http://www.oilshalegas.com/hornrivershalebasin.html


ANNNDDDDD ... you, in eastern Oregon,  are right in between these two formations.

Hmmmmmmmm .....
« Last Edit: May 15, 2013, 09:24:16 AM by mohawk70 »
Please remember:  The planet Earth is a VOLCANO.   You cannot "save" a volcano ... and volcanoes do not NEED to be saved.

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admin

  • 2502
    • RBSdot Web Development & Consulting

Here are some news links to the current players in Oregon.  I suspect that lease negotiations are initially going to be highly speculative until some holes get punched.  If history is any indicator, it will be the $25/5/12.5% that will prove or dis-prove the existence of commercially obtainable gas/oil.  IF resources are proven, THEN the bidding war for open land for lease begins.  If the holes turn up unproductive, those who got the $25 bonuses are happy and the holdouts get $zip.  If the holes turn out to be gangbusters, those with those $25 bonuses and low royalty payments are mad as hell, and the holdouts smile all the way to the bank.  (If they paid attention to their deductions, etc.)


As you can see from the links, you Oregonians will likely be facing a surge of drilling opponent blocking tactics, so IF gas is found, be prepared for a fight....   And I can tell you this one thing.  If you and your neighbors are not in this TOGETHER you are going to have a very rough row to hoe.

http://www.boiseweekly.com/CityDesk/archives/2013/02/14/natural-gas-vibroseising-shakes-up-oregons-malheur-county


http://idahopetroleumcouncil.com/?p=695
"I gave my kid a new credit card after he maxed out his last one.  He maxed the new one too and it appears that I am dumb enough to give him another one."  Too late now to stop.  The debt is too big.

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mohawk70

  • 10592
This came in the email a minute ago:

http://pipelineandgasjournal.createsend5.com/t/ViewEmail/r/A906A18777D840062540EF23F30FEDED/A6080E5852CA826D74AF8F7A76570606

It is the e-newsletter from Pipeline & Gas Journal.

It's a first; never got it before.   And I've been a subscriber to PGJ for decades.


ALSO, here is the link to subscribe to the Progressive Railroading magazine ... they have print and e-versions.   Both are free to the industry ... if you're on here, then you are in the  industry ... at least as a consultant.

http://www.progressiverailroading.com/visitorcenter/Signup_PR.asp

Who cares?  Well, where there are no pipelines or not enough of them, then the oil, gas and gas liquids get shipped by rail.   [In addition to drill pipe, pipeline pipe, frack sand, and etc.]



[Progressive Railroading and Trains are the two top rail publications.   When I was working for a company that had a large railroad, they wouldn't send them; after I retired, they sent them for free.   Go figure.]
« Last Edit: May 15, 2013, 10:10:07 AM by mohawk70 »
Please remember:  The planet Earth is a VOLCANO.   You cannot "save" a volcano ... and volcanoes do not NEED to be saved.

How about asking for a contingent lease which would give you an additional $_____ (you fill in the blank) bonus if the well(s) turn out to be productive.  That way the drilling company keeps their risk to a minimum and the landowners who sign the early leases aren't penalized for signing early.  I know the landmen will say that they have never done that before but there's always a first time for everything.
If you find yourself in a hole, the first thing to do is stop diggin!

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admin

  • 2502
    • RBSdot Web Development & Consulting
Keep in mind that the companies have thousands of leases to manage and you will likely have to not only fight to get a variable bonus clause, or Favored Nations clause, you will also have to follow up on the execution of those variables, because your lease and addenda terms often get lost in the paperwork / database shuffle.  Companies hate the extra, ongoing followup of variables built into a lease agreement.
"I gave my kid a new credit card after he maxed out his last one.  He maxed the new one too and it appears that I am dumb enough to give him another one."  Too late now to stop.  The debt is too big.

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Clay

great info everyone, thank you!  I'm going to go slow on this and keep learning. 

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Clay

I heard from a friend in another state that does leases that NARO had an environmentalist speaker (who was advertised as a landowner in favor of drilling) at a convention recently.  Nearly everyone there was surprised by the bait and switch.  Wonder what that was about?

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virtuallyme

would not be surprising if they misrepresented themselves
they misrepresent everything else!

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cara

  • 819
Clay:  Tell me more about the speaker.  How about a date and location?  Because of the number of state or area chapters it's impossible to attend all the conferences but I'm a member of all these entities.

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Clay

After posting this I asked the same friend for clarification because it would go against everything NARO seems to represent.  She was concerned that she may have been thinking about a different group.  I didn't pursue it any further, and think she was NOT at a NARO meeting.

Cara, I forwarded my lease to Curt for review, possibly have him do some work for us, though we are a small acreage and don't have the financial means to invest a lot as christian missionaries to a boys ranch.  Probably still a good investment.  in speaking with a V.P. @ Trendwell i can see some class.

opinions on TRENDWELL ENERGY CORPORATION? www.trendwellenergy.com

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Clay

Upon closer inspection, offer if $10 per acre up front per year for 2, then $10 per acre for 3 more, then it jumps up to 60 or $75.  seems a bit low, may counter.

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cara

  • 819
Oregon seems to be styling their lease bonus approach to that of California.  In most states the lease bonus is paid up front or at point of execution.  Since Curt was originally from CA he is familar with the process.

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mohawk70

  • 10592
Interesting article.

The snail mail copy is longer and has a nice color map of the shales west of the Mississippi.    HOWEVER ... doesn't show any of the shales in Washington State, Oregon, Nevada ... and we KNOW there are some shales in those locations.

Go figure.

http://www.progressiverailroading.com/rail_industry_trends/article/Shales-in-the-West-well-beyond-the-Bakken-drive-crude-oil-traffic-for-many-railroads--36140


[Says:   An EIA map shows some of the shales and basins west of the Mississippi River.   A few emerging plays, such as the Tuscaloosa Marine Shale in Louisiana, aren't depicted.]

[Who would have thought.]

[Marx said that in Louisiana they hunt elephants because the tuskaloosa.]

[Groucho]

« Last Edit: May 21, 2013, 10:52:12 AM by mohawk70 »
Please remember:  The planet Earth is a VOLCANO.   You cannot "save" a volcano ... and volcanoes do not NEED to be saved.

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Clay

Thanks Mohawk.  I'm planning to try for a 4+2 rather than a 2+3+3 year agreement.  Six should be enough time to know what to expect in this area.  I hope they'll agree to that, seems like a shorter term would be better...?