Jump to content

Hey Oil Barons.......


936horn

Recommended Posts

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.

  • Hook 'Em 1
Link to comment
Share on other sites

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?

Link to comment
Share on other sites

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. 

Link to comment
Share on other sites

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.

  • Hook 'Em 1
Link to comment
Share on other sites

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. 

  • Hook 'Em 1
Link to comment
Share on other sites

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.  

  • Hook 'Em 1
Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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?
Link to comment
Share on other sites

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. 

Link to comment
Share on other sites

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 by kevwun
  • Like 1
Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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. 

  • Hook 'Em 1
  • Like 2
Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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 by nbmishoid
Abc
  • Hook 'Em 1
Link to comment
Share on other sites

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. 

Link to comment
Share on other sites

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. 

  • Hook 'Em 1
  • Like 1
Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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. 

Link to comment
Share on other sites

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.
Link to comment
Share on other sites

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. 

  • Hook 'Em 1
Link to comment
Share on other sites

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.

Link to comment
Share on other sites

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.

  • Hook 'Em 1
Link to comment
Share on other sites

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.

  • Hook 'Em 2
  • Haha 1
Link to comment
Share on other sites

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) 

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.



×
×
  • Create New...