Oil is hot in Texas

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#1 Tue, Jun 14, 2011 - 8:24pm
wrs
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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
Tue, Jun 14, 2011 - 10:52pm
Biscuit
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Horizontal drilling and fracking

The fairly recently developed technology of horizontal drilling and the improved old technology of fracking now has geologist examining formations across the country that were previously not commercially feasible to drill and produce.

Naturally, the formations that are somewhat close to the existing necessary infrastructure will be selected for drilling first. But, expect to see oilfield activity in many places that have never seen a rig. And, to go along with the new activity, there will be plenty of NIMBY (not in my back yard) protests.

Wed, Jun 15, 2011 - 6:00am
C F
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Oil is hot

up in North Dakota as well, from what my relatives have been saying. There's enough energy in the Williston Basin - Bakken Formation to power this country for another hundred years.

Wed, Jun 15, 2011 - 8:48am
jumblies
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There's enough energy in the

There's enough energy in the Williston Basin - Bakken Formation to power this country for another hundred years

According to geology.com there is estimated to be 3.65 billion barrels of oil in the Bakken Shale formation. According to wikipedia US oil consumption is 21 million barrels per day, which is approximately 7.6 billion barrels per year. So that suggests there's roughly 6 months supply, not 100 years. And this also doesn't take into account increasing demand nor increasing costs nor the environmental impact.

Wed, Jun 15, 2011 - 8:58am
tmosley
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nma?

nma?

Wed, Jun 15, 2011 - 9:04am
tmosley
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I might also add that there

I might also add that there are new technologies coming up that will REVOLUTIONIZE oil production. Old, dead fields can be brought back online, and every ounce of oil can be extracted with practically no energy input with ionic liquids. It also makes the fast stretches of tar sands on this continent easily accessible.

https://www.matse.psu.edu/news/ionicliquids

This is the real deal, folks. I'm tempted to go buy the mineral rights to a bunch of pumped dry areas. Probably include that with RE purchases after the collapse.

Wed, Jun 15, 2011 - 10:34am
wrs
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nma = net mineral acre

Mineral leases are not for actual property but instead what is beneath the property. So the measure of a lease is in net mineral acres.

Thu, Jun 16, 2011 - 1:25pm
plata dude
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poolville, TX
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damn WRS

You must own some serious land, do you think oil will spike before or after the election?

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