Poll: Economic forecast for America by CT Members

[backhoeboogie]

Can't find any land bargains around me anywhere. Having more luck lately buying minerals than land. Some of the folks hoping to get rich quick on gas are bailing out now after selling land and holding minerals. Have been able to buy a couple of well secured real estate notes but finding good ones is becoming harder and harder as well.

You can also lease those minerals and flip them. I paid $75K in chum money and leased acreage on a 3/16 royalty. That was pretty scary for me. I flipped it to Chesapeake for $125K chum money and 27% royalty. So now I am netting just over 8% royalty and make a few nickels on the chum money. I'd like to find some more of these deals.

I haven't said much since Lammie asked me to quit bragging. For some reason she gets upset when I talk about gas. So it has been months since discussing it in this forum. As bad as the gas royalty prices are, they are still sweet as be nice in my opinion. The Haynesville Shale is really nice. Barnett is not bad at all.

 

[HerefordSire]

Can't find any land bargains around me anywhere. Having more luck lately buying minerals than land. Some of the folks hoping to get rich quick on gas are bailing out now after selling land and holding minerals. Have been able to buy a couple of well secured real estate notes but finding good ones is becoming harder and harder as well.

You can also lease those minerals and flip them. I paid $75K in chum money and leased acreage on a 3/16 royalty. That was pretty scary for me. I flipped it to Chesapeake for $125K chum money and 27% royalty. So now I am netting just over 8% royalty and make a few nickels on the chum money. I'd like to find some more of these deals.

I haven't said much since Lammie asked me to quit bragging. For some reason she gets upset when I talk about gas. So it has been months since discussing it in this forum. As bad as the gas royalty prices are, they are still sweet as be nice in my opinion. The Haynesville Shale is really nice. Barnett is not bad at all.

Now you are talking. Haynseville is (was) on fire.

 

[backhoeboogie]

Now you are talking. Haynseville is (was) on fire.

I'd love to tell you how great it really is (was) but Lammie will get offended. Don't know why. A cousin of mine out of Longview has made millions, owns two yaughts now etc etc. (If I had only listened to him way back when)

 

[HerefordSire]

Now you are talking. Haynseville is (was) on fire.

I'd love to tell you how great it really is (was) but Lammie will get offended. Don't know why. A cousin of mine out of Longview has made millions, owns two yaughts now etc etc. (If I had only listened to him way back when)

Keep it up backhoeboogie! Keep the pressure on while the getting is good.

 

[ga. prime]

Anybody ever heard of a place way up north in Maine called the Haynesville Woods?

 

[Ryder]

Now you are talking. Haynseville is (was) on fire.

I'd love to tell you how great it really is (was) but Lammie will get offended. Don't know why. A cousin of mine out of Longview has made millions, owns two yaughts now etc etc. (If I had only listened to him way back when)

I would like to hear this. Just try to be real humble telling the story. ;-)

What about the $75K? Details please. Acres? For how long?

 

[backhoeboogie]

I would like to hear this. Just try to be real humble telling the story. ;-)

What about the $75K? Details please. Acres? For how long?

When the gas companies lease, they pay a "bonus" money on a per mineral acre basis. One of the fly by nights was making an offer for less than $50K on a 1/8 lease. I offered them more on both ends. I flipped it to Chesapeake for more on both ends. No different than the fly by nights who are running around leasing up property before the bust. I took a risk at a risky time and got pretty nervous doing so. It turned out good.

 

[Brute 23]

That is what independant land men do. That is how one of my bosses got started. He leased up several porfolios of land and sold them to Chesapeak. This was years ago, before the big boom.

That is why I telll people don't lease to the first little company that comes thru your area when there is activity in the area.

 

[TexasBred]

Now you are talking. Haynseville is (was) on fire.

I'd love to tell you how great it really is (was) but Lammie will get offended. Don't know why. A cousin of mine out of Longview has made millions, owns two yaughts now etc etc. (If I had only listened to him way back when)

Diddn't know they had really been doing any serious drilling in the Haynesville for anyone to make millions. Just some pilot wells for testing the waters and the news was that drilling was expensive and production fell off faster than the BS did. I never talk $$$ but the BS wells have been gushers turned to basically nothing in 5 years.....Those drilled into the Bossier Sand formation come in huge and stay that way. When you can get a well producing over a billion cubic feet per month it's nice. Don't plan to get into leasing and flipping. Nobody would buy mine.

 

[backhoeboogie]

Diddn't know they had really been doing any serious drilling in the Haynesville for anyone to make millions. Just some pilot wells for testing the waters and the news was that drilling was expensive and production fell off faster than the BS did.

When you have played with cotton patch wells for 30 plus years, you accumulate thousands of acres of mickey mouse production wells. You could lease for 1/8 royalty and pay $50 an acre all day long. Collectively the whole land groups can make you a decent living if you have several thousand acres in production. The production pockets are only down around 7000 feet. Then the shale boon comes in and companies are offering $9,000 an acre in chum money during May, June, July of '08. The shale is down at 12,000 feet and takes big rigs to drill. You lease, flip your leases on very low production pools, take a 25% royalty which nets you an eighth, and you have made several million. Only 3 pools will net you well over 17 mil (in chum money alone)

Most of his old cotton patch production was in the Harrison, Greg, Panola County proximity. He has some holdings in Louisiana too. Some of his holdings are not on good layers of shale but others are on prime.

 

[TexasBred]

The shale is down at 12,000 feet and takes big rigs to drill. You lease, flip your leases on very low production pools, take a 25% royalty which nets you an eighth, and you have made several million. Only 3 pools will net you well over 17 mil (in chum money alone)

That's true for bonus money if you own all the minerals in all 3 pools and each is roughly 640 acres. Can't imagine a company paying anyone a 25% royalty on "low production pools" anywhere and then make a claim that those pools make anyone several million dollars.And all those old low production cotton patch pools should still be held by production making them "unavailable for lease" to a new company unless the company holding the lease wants to sell the lease . A well producing 100 million per month won't gross but $350,000 per month at today's gas prices. 10 of them would make 3.5 million gross and you get 1/8 of the gross IF you own all the acreage in the unit. This leasing, flipping and re-leasing of lands supposedly already held by production doesn't jive.

Our wells are all in the 14,000 ft. range except for the BS wells which are only about 7500 plus the lateral legs.

 

[ga. prime]

Hail of a forecast. Let's all go to Texas and buy up some gas wells.

 

[TexasBred]

Hail of a forecast. Let's all go to Texas and buy up some gas wells.

ga...not much leasing, drilling or anything else going oni right now. Gas is dirt cheap and not worth the expense to even mess with it. Drilling rig owners have lowered lease prices to half price and still no takers. A lot of wells have been choked back to hold production down as well until prices go back up. Gas like oil is pretty worthless if nobody is drilling. :help:

 

[ga. prime]

Hail of a forecast. Let's all go to Texas and buy up some gas wells.

ga...not much leasing, drilling or anything else going oni right now. Gas is dirt cheap and not worth the expense to even mess with it. Drilling rig owners have lowered lease prices to half price and still no takers. A lot of wells have been choked back to hold production down as well until prices go back up. Gas like oil is pretty worthless if nobody is drilling. :help:

Things change in a hurry! The profit is in predicting the turnaround.

 

[TexasBred]

Hail of a forecast. Let's all go to Texas and buy up some gas wells.

ga...not much leasing, drilling or anything else going oni right now. Gas is dirt cheap and not worth the expense to even mess with it. Drilling rig owners have lowered lease prices to half price and still no takers. A lot of wells have been choked back to hold production down as well until prices go back up. Gas like oil is pretty worthless if nobody is drilling. :help:

Things change in a hurry! The profit is in predicting the turnaround.

For the O&G co. that's true...the royalty owner, he's at their mercy. He takes his little share of whatever they produce whenever they bring it up. With gas it's really a good thing when they choke wells back during times of surplus and low prices. No need to give the stuff away. Sort of like selling cattle in today's market.

 

[backhoeboogie]

The shale is down at 12,000 feet and takes big rigs to drill. You lease, flip your leases on very low production pools, take a 25% royalty which nets you an eighth, and you have made several million. Only 3 pools will net you well over 17 mil (in chum money alone)

That's true for bonus money if you own all the minerals in all 3 pools and each is roughly 640 acres. Can't imagine a company paying anyone a 25% royalty on "low production pools" anywhere and then make a claim that those pools make anyone several million dollars.And all those old low production cotton patch pools should still be held by production making them "unavailable for lease" to a new company unless the company holding the lease wants to sell the lease . A well producing 100 million per month won't gross but $350,000 per month at today's gas prices. 10 of them would make 3.5 million gross and you get 1/8 of the gross IF you own all the acreage in the unit. This leasing, flipping and re-leasing of lands supposedly already held by production doesn't jive.

Our wells are all in the 14,000 ft. range except for the BS wells which are only about 7500 plus the lateral legs.

It jives very well if you are familiar with a Pugh Clause added to your lease amendments. My cousin put them in all my leases. Once the land is in production and the lease has lapsed, the company only owns the land down to 100 feet below their deepest drilled wells. So if your cotton patch is at 7, 432, you can lease from 7, 532 on down. The Haynesville is at 12,000 on most of my measley East Texas cotton patch leases. So I essentially double dipped. 25% is not good on the cotton patch but it was being offered left and right for the Haynesville Shale last summer.

If you want the specific details, pm me, we can exchange emails and I can send you my lease amendment clauses that contain the legal mumbo jumbo that enabled the double dip.

Land men hate me by the way. And that feeling is mutual. The ONLY reason I took that sweet deal on the 75 acres is because I told a friend not to lease with the deal he was being offered. I said something like, "Heck, I'll offer you a better deal than that" and his pants wearing wife decided I needed to put my money where my mouth was. So I did. It was pretty intimidating for a non business type like me. It turned out sweet but you never know - and you don't get the big head about it or start getting cocky. Next time you could get burned just as easily.

You are absolutely correct on the choking back too. On the holdings I have that is not in production, hopefully the leases will lapse. It would be terrible to get the initial surge at these prices.

There is also land that has never been leased. Carrizo Oil and Gas will not lease direct. You have to go through a land man. They have leased up everything surrounding my house and 16 acres so no one else is interested in leasing me. The best offer was 1/5th and $750 an acre. I told them to pound sand. Most of the neighbors have no holdings elsewhere. Some took the first offer of 1/8 and $250 an acre. The land men will flip it to Carrizo for 25% (and you know that TB.)

 

[HerefordSire]

The shale is down at 12,000 feet and takes big rigs to drill. You lease, flip your leases on very low production pools, take a 25% royalty which nets you an eighth, and you have made several million. Only 3 pools will net you well over 17 mil (in chum money alone)

That's true for bonus money if you own all the minerals in all 3 pools and each is roughly 640 acres. Can't imagine a company paying anyone a 25% royalty on "low production pools" anywhere and then make a claim that those pools make anyone several million dollars.And all those old low production cotton patch pools should still be held by production making them "unavailable for lease" to a new company unless the company holding the lease wants to sell the lease . A well producing 100 million per month won't gross but $350,000 per month at today's gas prices. 10 of them would make 3.5 million gross and you get 1/8 of the gross IF you own all the acreage in the unit. This leasing, flipping and re-leasing of lands supposedly already held by production doesn't jive.

Our wells are all in the 14,000 ft. range except for the BS wells which are only about 7500 plus the lateral legs.

It jives very well if you are familiar with a Pugh Clause added to your lease amendments. My cousin put them in all my leases. Once the land is in production and the lease has lapsed, the company only owns the land down to 100 feet below their deepest drilled wells. So if your cotton patch is at 7, 432, you can lease from 7, 532 on down. The Haynesville is at 12,000 on most of my measley East Texas cotton patch leases. So I essentially double dipped. 25% is not good on the cotton patch but it was being offered left and right for the Haynesville Shale last summer.

If you want the specific details, pm me, we can exchange emails and I can send you my lease amendment clauses that contain the legal mumbo jumbo that enabled the double dip.

Land men hate me by the way. And that feeling is mutual. The ONLY reason I took that sweet deal on the 75 acres is because I told a friend not to lease with the deal he was being offered. I said something like, "Heck, I'll offer you a better deal than that" and his pants wearing wife decided I needed to put my money where my mouth was. So I did. It was pretty intimidating for a non business type like me. It turned out sweet but you never know - and you don't get the big head about it or start getting cocky. Next time you could get burned just as easily.

You are absolutely correct on the choking back too. On the holdings I have that is not in production, hopefully the leases will lapse. It would be terrible to get the initial surge at these prices.

There is also land that has never been leased. Carrizo Oil and Gas will not lease direct. You have to go through a land man. They have leased up everything surrounding my house and 16 acres so no one else is interested in leasing me. The best offer was 1/5th and $750 an acre. I told them to pound sand. Most of the neighbors have no holdings elsewhere. Some took the first offer of 1/8 and $250 an acre. The land men will flip it to Carrizo for 25% (and you know that TB.)

Very good post!

 

[Brute 23]

Be glad when we choke your stuff back. Prices stink and its not going any where so consider it an investment.

 

[TexasBred]

Boogie I've let it be known that independents are not welcome on my property. I've dealt directly with the company with every lease situation...and yes all my leases have "Vertical Pugh Clauses" . Watch'em tho because a slick landman will try and write even the Pugh to the benefit of the O&G company unless you and your attorney keep him honest and specify pay zones covered.

 

[Brute 23]

Just put in a clause that says no assignments with out written permission from the owner. If the person you are talking to can not handle that then they are probably going to flip it. If they are the ones going to drill they won't have a problem with it.