Hey Oil Barons.......

[Storm the Field 5294]

Would like to see WTI break out of this ~$70-75 trading range over the last 6 weeks, but good to see that $67 or so seems to be a pretty reliable level of support. Last 4 times that shorts have driven it into the 60's, it recovers back to $70 within 2-3 days.

[52-80 19159]

natural gas went ballistic last week.  id been doing really well on NG and QG for the year but last week ate away a lot of the gains

[Guest]

On 6/16/2023 at 3:55 PM, Storm the Field said:

Would like to see WTI break out of this ~$70-75 trading range over the last 6 weeks, but good to see that $67 or so seems to be a pretty reliable level of support. Last 4 times that shorts have driven it into the 60's, it recovers back to $70 within 2-3 days.

I’m a tad surprised TI hasn’t broken out, but we have a lot of economic headwinds. It will be an interesting summer, more so than most. 

[billfromlaketravis 11481]

Welp, The Summer of George is over. They finished my office renovations 9 weeks early. We should hire this construction crew to build our gas plants.
 

The boss says I have to go back in 2 weeks. Grilling out and swimming during lunch on a Wednesday will be missed. 

Edited July 11, 2023 by billfromlaketravis

[tx 3 putt 76958]

O/G bonuses were rather thick this year 

[Storm the Field 5294]

On 6/16/2023 at 3:55 PM, Storm the Field said:

Would like to see WTI break out of this ~$70-75 trading range over the last 6 weeks, but good to see that $67 or so seems to be a pretty reliable level of support. Last 4 times that shorts have driven it into the 60's, it recovers back to $70 within 2-3 days.

WTI a quarter shy of $75 as we speak. Highest price since around Memorial Day. 

EIA report out today predicts an ongoing supply deficit for at least the next 5 quarters. 

Eventually, projections of future recessions come into conflict with the reality that the world is currently using more crude than is being produced. Something gotta give.

[Don Johnson 4753]

 

[Longhornsnus 200]

On 7/10/2023 at 10:59 PM, tx 3 putt said:

O/G bonuses were rather thick this year 

As they should be. Any word on Hilcorps crazy incentives?

Speaking if HilCorp, WSJ had a great piece on JH yesterday.

[tx 3 putt 76958]

Biden going after obama’s title of best o/g president ever 

[billfromlaketravis 11481]

55 minutes ago, Longhornsnus said:

As they should be. Any word on Hilcorps crazy incentives?

Speaking if HilCorp, WSJ had a great piece on JH yesterday.

Got the copy-pasta? 

[Longhornsnus 200]

8 minutes ago, billfromlaketravis said:

Got the copy-pasta? 

How a Houston Oilman Confounded Climate Activists and Made Billions

Jeffery Hildebrand built an empire by buying castoff wells from big companies under ESG pressure

 

Hildebrand attends the 2017 opening ceremony for a carbon-capture project in Fort Bend County, southwest of Houston. PAUL LADD/ASSOCIATED PRESS

 

By Benoît Morenne

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July 11, 2023 9:30 am ET

 

HOUSTON, Texas—Climate activists and Wall Street are making it tougher for Big Oil to stay in the oil business. They’ve also helped make Jeffery Hildebrand a multibillionaire.

Hildebrand, who is little known outside his hometown of Houston, has become one of America’s largest independent drillers by buying assets on the cheap, cutting costs and then squeezing out both oil and profit from wells that others left for dead.

 

“Smite the rocks with the rod of knowledge, and fountains of unstinted wealth will gush forth,” Hildebrand said in a speech last year, sharing a quote from Ashbel Smith, who has been called the father of the University of Texas. He then offered to cut the university’s president a check to have the words inscribed on campus—if “this Green New Deal era that we live in” would allow it. 

A knack for well-timed deals and a Rolodex filled with oil-industry CEOs have lofted Hildebrand, once a competitive pole vaulter, into the billionaire’s club. The Bloomberg Billionaires Index pegs his net worth at $8.98 billion, which would make him the second-richest man in Houston, behind Houston Rockets owner Tilman Fertitta ($10 billion) and before pipeline mogul Richard Kinder ($8.78 billion). 

Hildebrand’s company, Hilcorp Energy, aims to increase production nearly 40% to 500,000 barrels of oil and equivalent hydrocarbons a day by the end of 2026, according to Chief Executive Greg Lalicker. That would likely turn Hilcorp into one of the 15 largest oil companies in the U.S. If the company hits the mark, Hildebrand will award his 3,000 employees hefty bonuses that have become a trademark, in this case, $75,000 toward a new car, and $25,000 to a charity of employees’ choice, company executives said.

It’s a business model that is growing from a niche into a juggernaut as the industry’s giants, facing mounting calls to cut their carbon emissions, dial back on drilling and shed assets. Hilcorp is privately held so it doesn’t face ESG demands—short for environmental, social and governance issues—from investors. That means the pressure on big oil companies isn’t necessarily leading to less pumping, but rather pumping by less-accountable players.

 

Hildebrand took over BP’s interest in the Trans-Alaska Pipeline as part of 2020 deal that ended the British giant’s 60-year presence in the U.S. Arctic. PHOTO: MARIO TAMA/GETTY IMAGES

Hilcorp has become a natural clearinghouse for big oil companies looking to unload aging wells that may leak copious amounts of methane, a powerful atmosphere-warming gas. It’s now the second-largest emitter of greenhouse gas among U.S. oil-and-gas producers after ConocoPhillips, according to a May report by environmental nonprofits Ceres and the Clean Air Task Force. Hilcorp’s production is about a fifth that of ConocoPhillips, which declined to comment. 

According to Hildebrand, the company invests responsibly in older assets, whose environmental performance had often been neglected. Hilcorp has reduced greenhouse gas emissions from its operations and energy use by over 40% and cut methane emissions by 35% since 2019, he said. Hildebrand said Hilcorp’s role in the energy transition is to continue to produce fossil fuels to meet global demand.

 

Between 2017 and 2021, companies with methane-reduction goals sold $115.6 billion worth of assets to firms that don’t have explicit targets for reduction, the Environmental Defense Fund said in a report last year.

Over that same period, Hilcorp bought more than $9 billion worth of assets from companies including an Exxon Mobil affiliate, ConocoPhillips and BP, according to a tally by energy analytics firm Enverus.

Hildebrand’s ability to identify underperforming assets on other companies’ books has been the backbone of his success, said his close friend Anthony Petrello, the chief executive of drilling company Nabors Industries. 

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If a company is considering selling something to Hildebrand, it should probably ask, “Why weren’t my guys able to make money on it?” said Petrello, who serves as a Hilcorp director.

Hildebrand said his company focuses on older oil-and-gas properties where Hilcorp’s scale, experience and deep pockets give it an advantage over the smaller companies that have typically targeted aging assets.

“It’s what we’re good at,” Hildebrand said in an email.

 

A Hilcorp rig at Milne Point on Alaska’s North Slope. PHOTO: HILCORP

After oil prices plummeted during the pandemic, President Trump convened a White House meeting with the CEOs of Exxon, Chevron, Occidental Petroleum and other oil giants in April 2020. Hildebrand was the only private-company executive at the table.

Hildebrand is obsessed with efficiency and a student of the minutiae that make the difference between profit and loss, say friends. When he and his wife decided to open a doughnut shop in their mansion-studded River Oaks neighborhood, they sampled kolaches from more than a dozen shops to find the optimum flavor for the local pastry, according to people close to the couple. 

 Devout Catholics who avoid the limelight, he and his wife have donated millions of dollars to Christian ministries and organizations. Hildebrand often references a favorite Bible verse: “To whom much is given, much will be required,” said Les Csorba, a close friend of his and an adviser. 

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Hildebrand sees his charitable giving through the lens of efficiency, said Csorba, a partner at executive search firm Heidrick & Struggles, using metrics such as return on investment to measure the impact of his philanthropy. 

Hildebrand’s rise began modestly. The son of a Texas veterinarian, he did a brief stint at Exxon as a geologist before earning a master’s degree in petroleum engineering from the University of Texas at Austin. Soon, Hildebrand struck out on his own.

In the first of a series of gambles, he offered his wife Mindy’s car title as collateral for a bank loan to drill wells. The wells were a bust, but for Mindy, “the rate of return was infinite,” he said at an event last year. 

In 1989, he shifted strategies. With financial backing from Jack Trotter, a prominent Houston investor, he co-founded Hilcorp—short for Hildebrand Corporation—and started meeting with vice presidents at large oil companies, negotiating small properties away from them, said people close to him. Hildebrand’s bet was that he could stimulate older wells on the Gulf Coast with gas and water to coax out more oil, among other remediation techniques. 

 

Hildebrand, seated at the upper left corner of the table, was the sole private oil executive at a White House meeting convened by President Donald Trump in 2020.  PHOTO: DOUG MILLS/PRESS POOL

Refurbishing wells is common in the oil-and-gas industry but large producers focus on drilling gushers rather than on maintaining production from low-producing wells, which requires making many quick investment decisions and is more easily done by agile players such as Hilcorp, analysts said.

It worked. By 2001, Hilcorp’s payroll counted over 175 employees and had logged acquisitions totaling more than $225 million. Hildebrand bought out his partner, Thomas Hook, for $500 million in 2003.

When Hildebrand’s growth hit a ceiling, he turned to McKinsey for guidance, said Lalicker, who worked at the consulting firm at the time and became Hilcorp’s chief executive in 2018.

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McKinsey recommended that Hilcorp adopt a nimble and lean corporate structure, Lalicker said. What they came up with was a hierarchy that had no more than five layers between the lowest-ranking employee and Hildebrand.

The streamlined organization cuts costs and allows employees to make independent calls on how to best operate the wells. During a monthly companywide meeting called “lifting costs”—a reference to the aggregate cost of pumping subterranean hydrocarbons—17 asset teams take turns presenting their wells’ performance and explain how they’ll reach production goals, former employees said.

“Jeff does a lot more with assets than the majors can because of the culture he’s built,” said childhood friend Skip McGee, the chief executive of investment bank Intrepid Financial Partners.

The oilman’s crowning achievement was a 2020 deal for BP’s business in Alaska, which  ended the British giant’s 60-year presence in the U.S. Arctic and made Hilcorp Alaska’s second-largest producer.

Where BP saw aging and costly wells, Hilcorp saw the promise of explosive growth. In one fell swoop, it got hold of about 74,000 barrels of daily crude production, mostly in Prudhoe Bay, the largest oil field in North America—equivalent to almost a third of Hilcorp’s output at the time—as well as BP’s interest in Alaska’s largest oil pipeline. 

 

Hildebrand celebrated Hilcorp hitting production goals at a company event last year in Kenai, Alaska. PHOTO: HILCORP

Hildebrand capitalized on BP’s circumstances. Having committed to a $10 billion divestment plan, BP viewed its Alaska portfolio as a sale candidate because operating wells in the state’s extreme climes was challenging and production was distant from markets, according to company executives. Separately, BP was gearing up to announce a strategic shift away from fossil fuels and toward renewables. 

Hildebrand reached out to Bernard Looney, then BP’s head of oil-and-gas drilling and now the company’s chief executive, with an offer, said Bob Dudley, who was BP’s CEO at the time. 

“Jeff made what I would say was a very fair, aggressive proposal,” said Dudley.
The onset of the pandemic and collapsing oil prices in early 2020 nearly scuttled the deal. It was saved when BP agreed to lend Hilcorp $2 billion to fund the $5.6 billion transaction. Under the terms, Hilcorp put down at least $500 million, and agreed to pay the rest with future cash generated by the wells—a risky bet in the midst of the pandemic.

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SHARE YOUR THOUGHTS

Do you think Jeff Hildebrand’s business model is sustainable in the long term? Join the conversation below.

When the companies announced they had completed the sale of the upstream assets in early July 2020, U.S. oil prices stood at around $40 a barrel. By the spring of 2022, Russia’s invasion of Ukraine had sent prices past the $120 mark. 

Dudley, who retired in February 2020, said the deal could have soured for Hildebrand had oil prices stayed low for longer, but that it turned out to be terrific for the oilman.“That characterizes Jeff, and what he’s done with his career, you know—calculated risks, but lots of risk,” he said. 

In addition to buying BP’s stake in Prudhoe Bay, Hilcorp took over as operator of the field, which was jointly owned by ConocoPhillips, Exxon and Chevron. Under BP’s management, the unit’s output had been consistently declining, shrinking from 306,000 barrels a day in 2010 to 209,000 barrels a day in 2019, according to Mark Oberstoetter, an analyst at energy consulting firm Wood Mackenzie. The year Hilcorp took over, production in the field was up 2.6%. Prudhoe Bay so far this year has churned out about 224,000 barrels a day. 

A competitive polo player on the team he owns, Tonkawa, Hildebrand said the company has remained nimble despite its size by sticking to a core set of values, including “ownership” and “urgency.” “They are not just posters on the wall, they are the key to everything we do,” he said.

Andrew Logan, a senior director at Ceres, said that Hilcorp’s entire business model is aimed at extending the life of wells that the majors have no economic interest in exploiting, and that bigger companies would have to plug to meet their emissions-reduction goals. 

 

Hildebrand, left, plays polo for his Tonkawa team at the 2021 USPA Gold Cup Semifinal in Wellington, Fla. PHOTO: JOEL AUERBACH/GETTY IMAGES

“In a world where Hilcorp didn’t exist, wells would have shorter lives” and emit less greenhouse gas, he said.

Some environmental groups say Hilcorp’s appetite for aggressive growth means the company favors returns over investing adequately in environmental protections. The Environmental Protection Agency said last year that it found Hilcorp had failed to meet several requirements related to methane leaks at 35 of its Alaska facilities, some of which it bought from BP.  

Hilcorp executives say the company’s future is bright. The largest oil fields in the U.S. are starting to show their age, and Hilcorp is one of the few companies with the ability to extend their lives, they say. 

“I just want to buy old, complicated assets and figure out how to maximize the value from the last 10 or 15% of their life,” said Lalicker.

Write to Benoît Morenne at benoit.morenne@wsj.com

Corrections & Amplifications
Wood Mackenzie is an energy consulting firm. An earlier version of this article incorrectly misspelled it as Wood Mckenzie.

 

[Guest]

Hildebrand is a UT and industry badass.

8 hours ago, tx 3 putt said:

Biden going after obama’s title of best o/g president ever 

Dem presidents are the best for this business because of all the stupid shit they do.  Clinton was a glaring exception. Check out the SPR. Great job fuckface Granholm. 

[52-80 19159]

this chart of european natural gas prices (in blue, vs US gas in orange) is still one of the craziest things ive ever seen.

its a big driver of electricity prices, and pushed my household utility bills into the thousands for a couple of months.

 

[Guest]

6 hours ago, 52-80 said:

this chart of european natural gas prices (in blue, vs US gas in orange) is still one of the craziest things ive ever seen.

its a big driver of electricity prices, and pushed my household utility bills into the thousands for a couple of months.

 

It’s nuts and why I’m bullish on US nat gas prices. Do you live in Europe?

[52-80 19159]

3 hours ago, Porterhouse said:

It’s nuts and why I’m bullish on US nat gas prices. Do you live in Europe?

yup.  the shit went wild, and the winter was one of the colder/longer ones in recent years.  lots of stories in the news about german households having to hoard up all the firewood and stuff as an emergency measure -- which i dont quite think is economic in terms of $/btu but whatever

Edited July 14, 2023 by 52-80

[Hate 20108]

I love to see those LNG prices!

[T’Boo Ted Marshall 2732]

1 hour ago, 52-80 said:

yup.  the shit went wild, and the winter was one of the colder/longer ones in recent years.  lots of stories in the news about german households having to hoard up all the firewood and stuff as an emergency measure -- which i dont quite think is economic in terms of $/btu but whatever

[Guest]

1 hour ago, 52-80 said:

yup.  the shit went wild, and the winter was one of the colder/longer ones in recent years.  lots of stories in the news about german households having to hoard up all the firewood and stuff as an emergency measure -- which i dont quite think is economic in terms of $/btu but whatever

2nd warmest winter on record. 

[jeevsie 3734]

[billfromlaketravis 11481]

Hildebrand is great guy. We know some mural people from HLSR, and they all say he’s a genuinely good guy. I played my only card to go work for him, and it didn’t work out. They filled the position internally. He sent me a nice letter to explain. I respected his decision. 
 

His employee compensation is cutting edge and remarkably fair. Work hard, and get paid well for it. 
 

It’s not quite over. I might have one more card to play to get off the major hamster wheel.

[torre 1286]

Surly Barons,  your thoughts  ?   (Excerpts)

 

Goldman Sachs expects record demand in oil markets to drive crude prices higher in the near term.

“We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” Goldman’s head of oil research Daan Struyven told CNBC’s “Squawk Box Asia” on Monday.

He added that the bank forecasts Brent crude to rise from just above $80 per barrel now to $86 per barrel by year-end.

While Struyven acknowledged that U.S. crude oil production has risen significantly over the past year to 12.7 million barrels per day, he said that pace of growth will slow throughout the rest of 2023.

“We expect U.S. crude supply growth to slow down pretty significantly to a sequential pace of just 200 barrels per day from here,” he said, pointing to the decline in rig counts. That metric, which tallies the number of active oil rigs, is used as an indicator of drilling activity and future output.

The U.S. oil rig count recently hit its lowest level in 16 months, down 15% from its late 2022 peak, a recent Goldman report observed, citing data from Baker Hughes and Haver.

Last week, Baker Hughes reported U.S. oil rigs fell by 7 to 530 the lowest since March 2022.

https://www.cnbc.com/2023/07/24/goldman-sachs-expects-all-time-high-oil-demand-will-boost-prices.html

[Guest]

6 hours ago, torre said:

Surly Barons,  your thoughts  ?   (Excerpts)

 

Goldman Sachs expects record demand in oil markets to drive crude prices higher in the near term.

“We expect pretty sizable deficits in the second half with deficits of almost 2 million barrels per day in the third quarter as demand reaches an all-time high,” Goldman’s head of oil research Daan Struyven told CNBC’s “Squawk Box Asia” on Monday.

He added that the bank forecasts Brent crude to rise from just above $80 per barrel now to $86 per barrel by year-end.

While Struyven acknowledged that U.S. crude oil production has risen significantly over the past year to 12.7 million barrels per day, he said that pace of growth will slow throughout the rest of 2023.

“We expect U.S. crude supply growth to slow down pretty significantly to a sequential pace of just 200 barrels per day from here,” he said, pointing to the decline in rig counts. That metric, which tallies the number of active oil rigs, is used as an indicator of drilling activity and future output.

The U.S. oil rig count recently hit its lowest level in 16 months, down 15% from its late 2022 peak, a recent Goldman report observed, citing data from Baker Hughes and Haver.

Last week, Baker Hughes reported U.S. oil rigs fell by 7 to 530 the lowest since March 2022.

https://www.cnbc.com/2023/07/24/goldman-sachs-expects-all-time-high-oil-demand-will-boost-prices.html

Not convinced of a huge boost in demand right now. So I don’t know when it’ll happen, but the if is not in doubt. Woefully insufficient supply will rear its beautiful head soon. 

[Storm the Field 5294]

WTI has (just barely) hit a price starting with an 8 for the first time since April 18th. 

[Guest]

[nbmishoid 949]

On 7/14/2023 at 5:34 PM, billfromlaketravis said:

Hildebrand is great guy. We know some mural people from HLSR, and they all say he’s a genuinely good guy. I played my only card to go work for him, and it didn’t work out. They filled the position internally. He sent me a nice letter to explain. I respected his decision. 
 

His employee compensation is cutting edge and remarkably fair. Work hard, and get paid well for it. 
 

It’s not quite over. I might have one more card to play to get off the major hamster wheel.

I met him via advisory committee stuff and he was very friendly and helpful.   No ego given his billion in the bank.  

[babysdaddy 2724]

[52-80 19159]

5 hours ago, babysdaddy said:

 

referring to crude breaking 80?

[Armybrat 40849]

It seems to be bouncing around that number.

Heard some good news about my lease in ND. 
CLS (and another) got the clearance for up to 23 more wells in the expanded 2,560 acre spacing. 
That’s on top of the two that are supposed to spud in during August.

[Storm the Field 5294]

Really starting to break out. Up $7 over the past 2 weeks and almost $14 since hitting $68 this time a month ago.

Meanwhile, the rig count continues going nowhere. Actually down about 100 rigs from this time last summer. A lot has to do with natty crashing back to earth and WTI being stuck in the mud around ~$75 for a good chunk of 2023 so far. I also think there's a significant amount of companies that were/are looking to get bought out and are refraining from doing anything other than the bare minimum needed to keep leases alive and cash flowing. 

[Storm the Field 5294]

On PXD's earnings call this morning, they laid down $80-100 as their expected WTI price for the rest of 2023 and all of 2024. 

[Guest]

I think I posted here I was at an event where SS was a featured speaker shortly before his retirement and he called for $100 oil fairly quickly. IIRC he said perhaps by summer. 

I read a lot and listen to a lot of pundits and had reached a tepid conclusion about that anyway but he definitely accentuated my thinking. Probably confirmation bias. 

[Guest]

Major draws per both API and EIA and SPR unchanged. Missed any buyback window, likely. 

[Fudge Nuggets 19190]

2 hours ago, Storm the Field said:

On PXD's earnings call this morning, they laid down $80-100 as their expected WTI price for the rest of 2023 and all of 2024. 

O&G management teams have about the same track record for their predictions as we do.  I remember in early 2014 our global drilling manager being worried on how we would staff up to meet an expected 50% increase in headcount over the next couple of years. Oooooops.

[Guest]

Pioneer better than most. Scott exceedingly accurate over the years. And his successors aren’t exactly climbing out on a skinny branch with an obvious $80-$100 range. 

[babysdaddy 2724]

Demand touching all time highs and largest inventory draw on record (17mm) and WTI down 2.5%.  

[Guest]

3 hours ago, babysdaddy said:

Demand touching all time highs and largest inventory draw on record (17mm) and WTI down 2.5%.  

Stronger dollar and profit taking. I guess. All I can figure. 

[Fudge Nuggets 19190]

10 hours ago, Porterhouse said:

Pioneer better than most. Scott exceedingly accurate over the years. And his successors aren’t exactly climbing out on a skinny branch with an obvious $80-$100 range. 

What were his predictions since say 2016?

[Guest]

13 hours ago, Fudge Nuggets said:

What were his predictions since say 2016?

I don’t know man, why don’t you tell the group whatever what it is that you’re gleefully waiting to spring on me. 

[Fudge Nuggets 19190]

17 minutes ago, Porterhouse said:

I don’t know man, why don’t you tell the group whatever what it is that you’re gleefully waiting to spring on me. 

I'm not trying to spring anything.  You mentioned he has a great track record so I figured you might actually know what said track record was.

[Guest]

I said he had a good record, indicating I know his record. I’ll add I don’t feel any burden to prove my earlier comment. 

[billfromlaketravis 11481]

On 8/2/2023 at 12:58 PM, Porterhouse said:

Pioneer better than most. Scott exceedingly accurate over the years. And his successors aren’t exactly climbing out on a skinny branch with an obvious $80-$100 range. 

My math is really rough, but I assume we need a few months of $90 a barrel to get the WTI 2023 median to $80? 
 

It looks like the median was $74.92 in June. 
 

I’ve always thought of $80 as the sweet spot. Gas prices are reasonable. Stability at almost every O&G company. And better yet, no dumb ass science experiments that need $120 to make money. 

[Guest]

8 hours ago, billfromlaketravis said:

My math is really rough, but I assume we need a few months of $90 a barrel to get the WTI 2023 median to $80? 

That’s not what was reported what he said. I didn’t listen to the call but that’s not what @Storm the Fieldreported from the earnings call. 

[DefinitelyNotHollywoodColt 12301]

Not sure where to ask this but figured this thread is my best shot:

My mom has mineral rights for a property in North Texas and the local power company wants to put a solar farm on it and a landman has reached out to my Mom and offered like $1.5K to sign off on some paperwork. Then a couple of days later she gets a random solicitation from some type of O&G company offering her a similar amount for her interest.

What's going on here and how should she respond? I assumed her mineral rights didn't apply to solar but maybe I'm wrong? Is there an opp here to get residuals from the solar plant? What should I do?

[Patricio Swayze 17058]

Not sure where to ask this but figured this thread is my best shot:
My mom has mineral rights for a property in North Texas and the local power company wants to put a solar farm on it and a landman has reached out to my Mom and offered like $1.5K to sign off on some paperwork. Then a couple of days later she gets a random solicitation from some type of O&G company offering her a similar amount for her interest.
What's going on here and how should she respond? I assumed her mineral rights didn't apply to solar but maybe I'm wrong? Is there an opp here to get residuals from the solar plant? What should I do?

I suggest talk to a lawyer familiar with land and mineral rights. If I was still at the oil company (left a month ago), I would go ask the lawyer. What did she sign? $1,500 for what exactly? And yeah, I would expect royalties along with the lease. I would want to see what their projections are.

[babysdaddy 2724]

2 hours ago, DefinitelyNotHollywoodColt said:

Not sure where to ask this but figured this thread is my best shot:

My mom has mineral rights for a property in North Texas and the local power company wants to put a solar farm on it and a landman has reached out to my Mom and offered like $1.5K to sign off on some paperwork. Then a couple of days later she gets a random solicitation from some type of O&G company offering her a similar amount for her interest.

What's going on here and how should she respond? I assumed her mineral rights didn't apply to solar but maybe I'm wrong? Is there an opp here to get residuals from the solar plant? What should I do?

echo the above.  Talk to a local mineral rights/easement attorney.  For reference, we have a family ranch around San Saba and were offered $5k for an easement.  Found money, right?  Hired an attorney and got a check for $75k after his cut.  

[Guest]

2 hours ago, DefinitelyNotHollywoodColt said:

Not sure where to ask this but figured this thread is my best shot:

My mom has mineral rights for a property in North Texas and the local power company wants to put a solar farm on it and a landman has reached out to my Mom and offered like $1.5K to sign off on some paperwork. Then a couple of days later she gets a random solicitation from some type of O&G company offering her a similar amount for her interest.

What's going on here and how should she respond? I assumed her mineral rights didn't apply to solar but maybe I'm wrong? Is there an opp here to get residuals from the solar plant? What should I do?

Just because she owns the minerals doesn’t mean she has surface rights. What is going on on the land itself?  In other words, who controls the surface?

Depending on your answer, the solar company could just be confused.  I suspect she could earn solar royalties, but really not sure. 

The O&G company coming to her is probably totally unrelated and purely coincidental. It is probably a mineral company soliciting her particular acreage because they know something she does not. If you tell me (here or PM) the name of the O&G company and the county your Mom’s acreage is in, I can probably confirm for you what is up. I am very much largely disinclined to sell royalties I own, particularly when a company offers to buy. That tells me there will be drilling activity on her land (which also tells me she doesn’t control surface), and in 6-12 months her monthly checks will be increasing. I would respectfully tell the O&G company to eat a buffet of dicks. 

Nobody should ever sell royalties to a group that offers to buy them unless it’s at a significant premium AND you need the money. Otherwise don’t sell, unless it’s to me. 

[Armybrat 40849]

1 hour ago, babysdaddy said:

echo the above.  Talk to a local mineral rights/easement attorney.  For reference, we have a family ranch around San Saba and were offered $5k for an easement.  Found money, right?  Hired an attorney and got a check for $75k after his cut.  

Yep.

My first lease in North Dakota 10 years ago paid $150/acre signing bonus.
It sat undeveloped long enough that the oil company had to renew it at $4,500/acre “bonus” & 20% royalties after the neighboring spacing had hit pretty good play.

I pity the dumb cousins who sold their rights for chicken feed before the renewal.

No surface rights for my lease however, it’s 50’ or 60’ under Lake Sakakawea. 😁

Edited August 11, 2023 by Armybrat

[Storm the Field 5294]

CHK completes its exit from the Eagle Ford. Silverbow just bought all their remaining South Texas assets for $700M. 

[Patricio Swayze 17058]

CHK completes its exit from the Eagle Ford. Silverbow just bought all their remaining South Texas assets for $700M. 

I am questioning whether I did the right thing by switching back to the engineering side of the fence. But news like this is what made me nervous working for an oil company with assets in the EF. Before I left they laid down two rigs. Made me wonder if they were looking to sell. Hell, most of the field folks had already worked the same asset under at least 3 companies.

[Guest]

1 hour ago, Patricio Swayze said:

I am questioning whether I did the right thing by switching back to the engineering side of the fence. But news like this is what made me nervous working for an oil company with assets in the EF. Before I left they laid down two rigs. Made me wonder if they were looking to sell. Hell, most of the field folks had already worked the same asset under at least 3 companies.

You’re going to continue to see it (consolidation) in shale plays that are in irreversible decline which includes the EFS, Bakken, and to a lesser extent the Marcellus. You’ll see it increasingly in the Haynesville and Permian in the next few years as those basins get there. Good news for you is that the A&D market is still terrible. It shows signs of strengthening but ‘23 has been bad for deals. This CHK exit is only because they want to be a natural gas pure player and are now only in Marcellus and Haynesville. 

If I were advising them I’d have told them to shed their Appalachian assets to a) have some commodity diversity (gas has been and will continue to be weak) and b) EF and Haynesville are geographically close to each other and OKC.