Hey Oil Barons.......

[52-80 19151]

4 hours ago, Porterhouse said:

I bet we know each other. It was a good talk I thought. 

Austin.craigslist.org/missed_connections/index.html

[Fudge Nuggets 19190]

On 5/4/2023 at 10:55 AM, tbone_ said:

Why is gas so high again if oil is at $70?

Is the cliff note answer just because?

Peasant gas is comfortably below $3 where I live.  Gas isn’t high. 

[HamsterHookah 112]

On 4/4/2023 at 9:23 AM, Storm the Field said:

Breaking: Permian Acreage Still Expensive.

Announced yesterday that Ovintiv is selling their remaining Bakken acreage and going all-in on the MIdland Basin. Dropping $4.3B to buy up 65K acres from 3 EnCap companies (Black Swan, Piedra, and PetroLegacy). 

4.3B/65K = ~$66K/acre.

 

 

On 4/4/2023 at 2:05 PM, Porterhouse said:

Ovintiv is Encana renamed. Or after or in conjunction with their Newfield purchase.

Other people can comment on their struggles, and I know some of their people, and they haven’t impressed. I don’t think they ever had a stellar reputation. Denver was always their American HQ but pretty sure they moved the whole thing to Houston 5 or so years ago. My issue with them is their division orders and owner relations people. The wells they’ve drilled and completed in my area are solid. 

 

On 4/4/2023 at 2:59 PM, HamsterHookah said:

Thanks for the response. As a strategy consultant with customers in O&G, but not a dyed in the wool O&G guy, you've been helpful/insightful to people like me, on this thread.

Just caught up on the Ovintiv Q1 earnings call which was this morning:

First, we entered into an agreement to acquire core Midland acreage and added over 1,000 locations to our inventory. And second, we entered into a separate agreement to sell all our assets in the Bakken for $825 million.

[Armybrat 40839]

On 5/10/2023 at 10:40 PM, HamsterHookah said:

 

 

Just caught up on the Ovintiv Q1 earnings call which was this morning:

First, we entered into an agreement to acquire core Midland acreage and added over 1,000 locations to our inventory. And second, we entered into a separate agreement to sell all our assets in the Bakken for $825 million.

Who bought your Bakken assets?

[tequila 317]

Who bought your Bakken assets?

Greyson Mills. EnCap backed operator that is consolidating acreage up there. If you have royalty interests under them, it’s probably a good thing for you.

[Armybrat 40839]

54 minutes ago, tequila said:

Greyson Mills. EnCap backed operator that is consolidating acreage up there. If you have royalty interests under them, it’s probably a good thing for you.

Mine are with Continental Resources.

[StassneyHorn 6575]

nm

Edited May 14, 2023 by StassneyHorn

[bluto 4927]

Oneok buying Magellan (have a hefty OKE holding from covid dividend sniping, hope this doesn’t bone it)

[DalTxHornFan 3101]

I've been long on Oneok for a long time.  Need to study this, but I think the acquisition looks like winner.

[DalTxHornFan 3101]

18 hours ago, DalTxHornFan said:

I've been long on Oneok for a long time.  Need to study this, but I think the acquisition looks like winner.

Market wasn't crazy about the OKE/Magellan tie-up.  OKE down 9% today. Not clear about why the reaction.  Maybe it just makes OKE more complicated.  OKE has been a dividend machine for decades. 

[HamsterHookah 112]

7 hours ago, DalTxHornFan said:

Market wasn't crazy about the OKE/Magellan tie-up.  OKE down 9% today. Not clear about why the reaction.  Maybe it just makes OKE more complicated.  OKE has been a dividend machine for decades. 

OKE was down, but Magellan was up like 13% from what I saw. Not sure what that means either.

A friend used to audit (PwC) OKE and he always talked how brutally cheap and smart OKE always seemed to be, so I tend to trust their judgment.

[bluto 4927]

15 minutes ago, HamsterHookah said:

OKE was down, but Magellan was up like 13% from what I saw. Not sure what that means either.

A friend used to audit (PwC) OKE and he always talked how brutally cheap and smart OKE always seemed to be, so I tend to trust their judgment.

Guessing it was up to match the effective price oke paid, definitely a premium as of fridays trading price but it was also tied to share price of oke. 

[fattyflattie 4639]

7 hours ago, DalTxHornFan said:

Market wasn't crazy about the OKE/Magellan tie-up.  OKE down 9% today. Not clear about why the reaction.  Maybe it just makes OKE more complicated.  OKE has been a dividend machine for decades. 

Yep.  OKE is the best individual I've ever owned, both trading it and dividends thru the years.  It's everything I ever wanted XOM to be.  

[hornmpa96 2618]

16 hours ago, DalTxHornFan said:

Market wasn't crazy about the OKE/Magellan tie-up.  OKE down 9% today. Not clear about why the reaction.  Maybe it just makes OKE more complicated.  OKE has been a dividend machine for decades. 

Market is always skeptical of M&A. History shows the acquiror almost always overpays. I don’t know if I’ve seen a transaction where the acquiror stock goes up immediately after announcement.

[kevwun 15782]

I have a questions OG people.

My parents own 3.5 acres and are in the pool for a couple new gas wells that are being drilled nearby.  4-5 different companies have called them with offers to buy their mineral rights over the last couple months.  The first offer was 50K and the last 2 were for 80.  How in the hell can the mineral rights to such a small plot be worth that much?  Are these gas wells going to produce at a ridiculous amount?  That's the only thing I can figure.

[Dr Fear 1268]

I have a questions OG people.
My parents own 3.5 acres and are in the pool for a couple new gas wells that are being drilled nearby.  4-5 different companies have called them with offers to buy their mineral rights over the last couple months.  The first offer was 50K and the last 2 were for 80.  How in the hell can the mineral rights to such a small plot be worth that much?  Are these gas wells going to produce at a ridiculous amount?  That's the only thing I can figure.

Where?

[kevwun 15782]

Close to Fayetteville

[Dr Fear 1268]

Close to Fayetteville

What state

[kevwun 15782]

Texas

[Storm the Field 5294]

19 minutes ago, kevwun said:

I have a questions OG people.

My parents own 3.5 acres and are in the pool for a couple new gas wells that are being drilled nearby.  4-5 different companies have called them with offers to buy their mineral rights over the last couple months.  The first offer was 50K and the last 2 were for 80.  How in the hell can the mineral rights to such a small plot be worth that much?  Are these gas wells going to produce at a ridiculous amount?  That's the only thing I can figure.

Is that a full 3.5 net mineral acres? That's about $23K/NMA if so, which seems pretty hefty (without knowing typical prices). Know any landmen or people that work in mineral buying? Probably worth having someone look into it (typical offers for the area, permitting activity and production levels from nearby wells....etc.) unless of course they have no interest in selling whatsoever.

From a cursory search of the area, looks like it's almost all Austin Chalk gas wells. One thing to consider is that (shitty nat gas prices aside), those AC gas units can produce at a pretty solid clip for decades. 

[kevwun 15782]

Yes, they own all of the rights.  They aren't really interested in selling because if someone is offering that much, they're probably better off in the long run holding on to them and collecting royalties.  We're just shocked by the offers.

Edited May 19, 2023 by kevwun

[nbmishoid 949]

Well, you need to model a few scenarios to see where the royalty option and the cash purchase options appear equivalent.  Factor in some appropriate risk. Any form of deal can work.  It’s not the form, it’s the terms and numbers.

[kevwun 15782]

A lot of people in their area are leery about selling their mineral rights.  There was a guy in the 70's and 80's who bought up a bunch right before the first oil boom in the area that cost the landowners a good deal of money once the wells went in.

[billfromlaketravis 11466]

1 hour ago, kevwun said:

A lot of people in their area are leery about selling their mineral rights.  There was a guy in the 70's and 80's who bought up a bunch right before the first oil boom in the area that cost the landowners a good deal of money once the wells went in.

I’d advise them not to sell unless there’s an emergency and they need liquidity. Just sit back and enjoy that mailbox money. 

[T’Boo Ted Marshall 2732]

A lot of people in their area are leery about selling their mineral rights.  There was a guy in the 70's and 80's who bought up a bunch right before the first oil boom in the area that cost the landowners a good deal of money once the wells went in.

Sounds like a smart guy.

[kevwun 15782]

I think he took advantage of a lot of old people who didn't know better.

[Fudge Nuggets 19190]

11 hours ago, kevwun said:

I think he took advantage of a lot of old people who didn't know better.

A tradition as old as the industry itself.

[Armybrat 40839]

20 hours ago, kevwun said:

Yes, they own all of the rights.  They aren't really interested in selling because if someone is offering that much, they're probably better off in the long run holding on to them and collecting royalties.  We're just shocked by the offers.

I & my numerous relatives have had scores of offers for our mineral rights in the Bakken of North Dakota. We average about 12 or so acres each. 
The offers that actually state a number have ranged from $60,000 to $130,000, but most don’t give an amount. 
I heard a couple of the relatives did sell out early on several years ago, which was a dumb move, as the average royalties to date for each of us has totaled about $350,000 over the past four years. 
Plus more wells are to be drilled in a different spacing which includes the other part of our lease. (The ancestor had two properties that were about a half mile apart).

 

18 hours ago, billfromlaketravis said:

I’d advise them not to sell unless there’s an emergency and they need liquidity. Just sit back and enjoy that mailbox money. 

This.

[Armybrat 40839]

14 hours ago, kevwun said:

I think he took advantage of a lot of old people who didn't know better.

Yep, some of my distant relatives are mouth breathers.

[billfromlaketravis 11466]

As an aspiring ranch owner, I assume I can’t expect the minerals as well? I’ve heard people are selling ranches, but reserving their minerals. 

[Armybrat 40839]

34 minutes ago, billfromlaketravis said:

As an aspiring ranch owner, I assume I can’t expect the minerals as well? I’ve heard people are selling ranches, but reserving their minerals. 

A smart seller would retain their mineral rights.

In the case of my ancestor, the federal government “eminent domained” his two pieces of farm land to build Lake Sakakawea 70 years ago, paid him for the taking, but forgot to include the mineral rights.

Probably because the bureaucrats never thought anything like extreme horizontal drilling was possible then, and more probably because they didn’t have a clue about the rich shale deposits two miles underneath the land? 
I dunno.

[nbmishoid 949]

70 yrs ago that shale was viewed as source rock not reservoir.   Not economically recoverable, etc.  Not just a bureaucratic view, but also,the legit technical view of the day.  Times and technology change.  Forecasting such 70 yrs in the future is hard, as Yogi Berra might say.  And, the government didn’t have a domain/use case for the mineral rights.  Those had nothing to do with the surface reservoir.

Edited May 20, 2023 by nbmishoid
Abc

[Guest]

On 5/19/2023 at 2:04 PM, kevwun said:

I have a questions OG people.

My parents own 3.5 acres and are in the pool for a couple new gas wells that are being drilled nearby.  4-5 different companies have called them with offers to buy their mineral rights over the last couple months.  The first offer was 50K and the last 2 were for 80.  How in the hell can the mineral rights to such a small plot be worth that much?  Are these gas wells going to produce at a ridiculous amount?  That's the only thing I can figure.

Yes. Do NOT sell until they speak with a land man recommended to you by someone you trust. And that person will likely demonstrate exactly why they should have never considered selling in the first place. 

[hornmpa96 2618]

23 hours ago, billfromlaketravis said:

As an aspiring ranch owner, I assume I can’t expect the minerals as well? I’ve heard people are selling ranches, but reserving their minerals. 

You can get minerals from some landowners it be prepared to pay. 

[Armybrat 40839]

Question for any of you Texas O&G guys….

Is there any new activity going on around the Corsicana/Navarro Mills Lake area?

We own a half acre lot close to the lake and have noticed a big uptick in unsolicited cold calls wanting to buy it. Plus Navarro County just tripled the appraised value of the property.

I have no clue if the old oil fields up that way are still producing anything or if they’ve made new discoveries in the area. 
Or if there is some kind of new development going on.

[billfromlaketravis 11466]

5 minutes ago, hornmpa96 said:

You can get minerals from some landowners it be prepared to pay. 

Towns within 2 hours of West Houston where O&G development is completed dead?
 

I like Simonton quite a bit, but a family friend was looking a ranch to park some show Longhorns out there and he couldn’t get around the mineral rights issue. Nobody would sell. He wasn’t trying to buy all their mineral rights, just a piece so he could have some say in leasing. No dice. He gave up and is looking elsewhere. 

[DalTxHornFan 3101]

Never sell mineral rights.  Ever.

[Dr Fear 1268]

Towns within 2 hours of West Houston where O&G development is completed dead?
 
I like Simonton quite a bit, but a family friend was looking a ranch to park some show Longhorns out there and he couldn’t get around the mineral rights issue. Nobody would sell. He wasn’t trying to buy all their mineral rights, just a piece so he could have some say in leasing. No dice. He gave up and is looking elsewhere. 

If you are talking individuals not companies, it appears to me that the most likely to sell are people who recently inherited them.

[Storm the Field 5294]

2 hours ago, Armybrat said:

Question for any of you Texas O&G guys….

Is there any new activity going on around the Corsicana/Navarro Mills Lake area?

We own a half acre lot close to the lake and have noticed a big uptick in unsolicited cold calls wanting to buy it. Plus Navarro County just tripled the appraised value of the property.

I have no clue if the old oil fields up that way are still producing anything or if they’ve made new discoveries in the area. 
Or if there is some kind of new development going on.

Just took a quick look at the RRC website. Only thing within a few miles of Navarro Mills Lake is a bunch of dry holes.

Most of the activity in Navarro has been SE of Corsicana, near the reservoirs, and that's mainly old shit, most of which has been plugged. Less than 20 drilling permits issued in Navarro Co. in the past 5 years, and not a single one since June 2022. 

[Armybrat 40839]

Then there must be some kind of real estate activity then.

[hornmpa96 2618]

10 hours ago, billfromlaketravis said:

Towns within 2 hours of West Houston where O&G development is completed dead?
 

I like Simonton quite a bit, but a family friend was looking a ranch to park some show Longhorns out there and he couldn’t get around the mineral rights issue. Nobody would sell. He wasn’t trying to buy all their mineral rights, just a piece so he could have some say in leasing. No dice. He gave up and is looking elsewhere. 

I’m not sure about that area. I generally look at hunting acreage in South TX and sometimes see minerals available. However, it always comes at a price.

[Fudge Nuggets 19190]

Chevron announces plans to acquire PDC Energy.

[Storm the Field 5294]

2 hours ago, Fudge Nuggets said:

Chevron announces plans to acquire PDC Energy.

CVX is really cornering the market in the DJ Basin. This gives them another 275K acres in Colorado on top of what they acquired when they bought Noble.

[Guest]

PDC from what I recall was a pretty well run company that drilled great gas wells with little leverage. 

[billfromlaketravis 11466]

12 hours ago, Storm the Field said:

CVX is really cornering the market in the DJ Basin. This gives them another 275K acres in Colorado on top of what they acquired when they bought Noble.

Theories? They want the Colorado liquids for feedstocks in their other business units?

[hornmpa96 2618]

21 hours ago, billfromlaketravis said:

Theories? They want the Colorado liquids for feedstocks in their other business units?

They are paying $7.6 billion and increasing free cash flow next year by $1 billion. The press release mentions they are paying $7 per barrel for the probed reserves and it’s in acreage that CVX already knows well. Wirth is an excellent CEO who understands M&A. PDC’s equity can be bought at a discount as the market doesn’t like the materiality of the Colorado acreage given the local political climate; however, that’s not an issue for a company of CVX’s size.

[Fudge Nuggets 19190]

14 hours ago, hornmpa96 said:

They are paying $7.6 billion and increasing free cash flow next year by $1 billion.

Acquiring management team's forecasts rarely if ever pan out like they expect them to.

[hornmpa96 2618]

4 hours ago, Fudge Nuggets said:

Acquiring management team's forecasts rarely if ever pan out like they expect them to.

Of course not, if they could predict commodity prices next year, then they wouldn’t be working at Chevron and would be posting on Surly from their private island in the Caribbean.

[fattyflattie 4639]

On 5/21/2023 at 9:33 PM, hornmpa96 said:

I’m not sure about that area. I generally look at hunting acreage in South TX and sometimes see minerals available. However, it always comes at a price.

Same. It’s available, like anything else. Just a factor of how much you want to pay (to the point it doesn’t make sense) 

[Guest]