The Rig count is down over 50% from a year ago today.

 

The Rig count is down over 50% from a year ago today. The rig count has effected areas stronger then others. Some areas such as the Marcellus and Haynesville areas have fared better. Gas plays are showing to be prosperous leaving the question if operators are hedging natural gas against oil prices.

Are Oil & Gas Operators Using Natural Gas As A Hedge? Check out the article by Forbes

By Braeden Gilchrist

The US rig count is down 56% from this time last year. The rig count decline has hit some areas harder than others. For example the Bakken has lost more than three quarters of its rigs (figure 1). The Eagle Ford, Eaglebine, and Granite Wash plays also saw above average losses. Plays such as the Marcellus and Haynesville have fared better. One difference in these plays that could explain some the unbalance is oil to gas ratios. The areas faring better are gas plays. Are operators using natural gas production as a hedge against current oil prices?


Price where Barrel is at - Ramon De Hoyos speaking about Houston, Texas updates

Here is a video blog talking about where the barrel is at, where consumer should focus efforts on for projects and budgets.  Comparison of prices today versus what they used to be.  

Keywords: Geology, education, and opportunities.
Whole leases, expired leases, affordability, market values, current trends, valuations, acres.

Watch the video blog: https://youtu.be/tTRvuzKuKQU

Transfer on Death Deeds Now Valid in Texas

September 2015

The Transfer on death is the same as other conveyances, except upon Grantor's death title can then be traceried to the Grantee. 

Texas property owners now have a new tool to avoid probate. Effective September 1, 2015, Texas Estate Code Section 114.151 allows for Transfer on Death Deeds. Lawmakers believe this provision will provide a simplified process for the non-probate transfer of real estate.

A Transfer on Death deed operates the same as any other conveyance, except that title does not pass to the grantee until the grantor’s death.  The property conveyed passes outside of the grantor’s estate.  To be effective, a Transfer on Death Deed must be signed, notarized, and recorded in the deed records of the county where the property is located prior to the death of the grantor. It may not be created through the use of a power of attorney. An unrecorded Transfer on Death Deed is ineffective to convey property.

Read the full article by Donald T. Hueske and Ashley Howie Tallichet -  click here

There are oil and gas companies in the U.S. who might begin suffering monetary anxiety on future months to come as their hedging protection begins to expire.

There are companies within the oil and gas Industry who have hedged the majority of their production in locked rates to secure prices. As time passes, so do expiring hedges which leave Oil and Gas Companies exposed to lower market prices. Banking regulator are forcing banks to take a more controlled approach to their energy loans in the future. Banks will have "workout" groups who will be responsible for recouping the loan in its entirety. 

Venezuela President signed a $5 billion dollar loan from China to help aid with boosting oil output assured to increase exports towards the Country's largest Creditor.

Venezuela President signed a $5 billion dollar loan from China to help aid with boosting oil output assured to increase exports towards the Country's largest Creditor.

By: http://www.bloomberg.com/news/articles/2015-09-02/venezuelan-signs-5-billion-china-loan-for-lifting-oil-output

President Nicolas Maduro hopes that the signing of this loan will help his country's production jump from 700,000 to 1,000,000 barrels a day that was set from former President Hugo Chavez. Venezuela has been covering current loans that they have with China through shipments of oil. 

 

Tracts of Land With Mineral Interest

By Ramon De Hoyos

Friends and mineral owners who I have leased from are asking about other tracts of land with mineral interest. 

These tracts of land have been leased in past years but they have never been a part of any drilling program.  Their mineral interest has been leased multiple times throughout the family lineage and that has always been the extent of it.

There are few questions you want to ask your Landman when you are going to lease out your Mineral Interest:

  1. Who are you leasing on behalf of?
  2. Is the company, your Client leasing towards any local drilling programs? 
  3. What surrounding other areas, if any, have they leased? 
  4. Should I hold out and not lease?

 You want to know who they are leasing from as it will give you an idea of who might be in your neighborhood actively leasing towards drilling. It is in your best interest to be leased by a company who will come in to explore and produce your mineral interest along with a company who has been actively leasing around you.

 There are other companies you can work with that may be in your better interest and not just the “big name oil and gas companies.”   

 A smaller oil and gas company, will usually have your interest in part of a drilling program and most likely will not want to tie up for your land for a long-term period.

Do homework or hire a Landman to do some research for you.

You want to know:

  • What is the closest producing well?
  • Where are permits being filled in the county?
  •  What is the rig count in the county?
  • Where are leasing being filed in the county?
  • What type of formation is everyone in the area drilling at?

Holding out and not leasing when the opportunity arises can be a challenge.

Two Types of Unleased mineral interest:
1) Unleased mineral owner on a drillsite tract

2) Unleased mineral owner on a non drillsite tract

Here in Texa: , If you are a unleased mineral owner and pooled into a unit well you might not always share in production. If a company has leases around the unleased mineral owner they can still be included in the unit, the oil and gas company does not need a lease to do so. Now, just because the unleased mineral owner is included in the unit this does not mean the unleased mineral owner will share off and production from the unit well. If the unleased mineral interest is part of a drillsite tract then the unleased mineral interest will share in production from the well. A drillsite tract is defined as property that all or a part of the wellbore passes underneath the property. On vertical wells the wellbore is located directly underneath the surface of that single property location. On a horizontal well there would be multiple drillsite tracts that fall along the wellbore path. An unleased mineral owner tract is not a drillsite tract then they do not share in any of the revenue from production.

If the unleased mineral owner is on a drillsite tract, than co-tenancy laws will apply, and the unleased mineral owner will receive his full share of production in proportion to the number of acres owned in the unit, this is only AFTER THE WELL PAYS OUT.

 Here is an example:  Patrick is an unleased mineral owner who owns 100% of the minerals on a 50.00 acres tract that happens to be a drillsite tract that is included in a 500 acre unit. Patrick will be entitled to 50/500ths of all revenues from production. If Patrick had leased with the Oil and Gas Company for 1/5 royalty his share would be 1/5th of 50/500ths of production.    See the difference? It is a huge risk for an unleased mineral owner to hold out and wait for the well to pay out versus receiving money has soon as the well goes into production. To clear the phase “pays out” this means the point at which the oil and gas company who drilled the well and operates the well recoups all of its cost towards drilling and completing the well. Some wells cost several millions of dollars to drill and complete. A lot of times depending on the production of the well it may take years for the well to payout or production might stop and it might not never pay out. Therefore if Patrick were to lease his interest he would receive a royalty share from production.

You will be carried into working interest if your mineral interest is part of a drillsite tract. If you sign a lease, then you will receive upfront bonus consideration along with royalty checks -- if your interest is part of a producing unit.

If you hold out and carry working interest, the well could last a few years and never recover cost(s), so you will never receive anything financially.  

 

Keep in mind, as a mineral owner signing an Oil and Gas lease, you give the Company you are working with the right to enter the property, perform the necessary geological measures to determine if there lies a formation for which they can drill and target towards production.

 The primary term is the time period that the Oil and Gas Company has to enter and explore the property. If production does not commence before the primary term of the lease expires then all the interest and rights return to the mineral owner.  With that said, occasionally mineral owners will be leased.  After geology interpretations are conducted by the Oil and Gas Company they can decide not to continue exploration in that area because it did not find sustainable information for them to move towards the drilling phase.

 

Changing peoples lives

In any project I am working. I know one thing is certain. Paying people for an oil and gas lease. Giving money to individuals for something that their heirs decided to do. Anytime you are giving someone money for their permission to drill and also giving them HOPE that more check are to come you pass a community connection you become family. 

Landman Magazine

Published bimonthly, Landman has established itself as the key magazine of the oil, gas and minerals land management profession. Each issue addresses primary land issues along with a proper balance of association news and information relating to peripheral areas of concern. Each member receives a hard copy and access to the electronic version through the Members Only section of www.landman.org.