Oil is hot in Texas

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#1 Tue, Jun 14, 2011 - 8:24pm
Austin, TX
Joined: Jun 14, 2011

Oil is hot in Texas

In the last six months, we have had every acre we own get lease offers for O&G drilling. Our best deal was in Leon County where we got $500/nma for a smallish 100 acre lease. We have a current offer of $200/nma for 3200 acres in Walker county but are waiting to see how some new wells go that are on the boundary of one of our properties. Next door in Grimes county we just signed a lease for $325/nma. Our two sections out in the Permian Basin were leased three years ago for $200/nma but that was with low oil prices. When they came back around we were able to get $300/nma for only a 2 year lease.

I took my wife and youngest daughter to Port Aransas this weekend and we drove down through Karnes county which is hot. There are drilling rigs all over and lot's of new mobile homes everywhere. It reminded me of Giddings back in the early 80s when the Austin Chalk was producing at $35/bbl. New apartment buildings are going up in the small towns. The drilling business is hot in south Texas right now. The Eagle Ford is the new exciting play in Texas, Marathon paid $25,000/acre for 141,000 acres in Karnes and Dimitt counties I believe.

Oil is the big game in Texas as it always has been and with prices likely to get over $150/bbl in the not too distant future, it should remain that way. You sure can't tell there is a recession down here, that's for sure.

Edited by: wrs on Nov 8, 2014 - 5:18am