Driller took a mortgage out on mineral rights... question is...

If ascent uses mineral rights to secure and loan or mortgage does that mean they will renew the lease??? if the lease expires and drillers do not renew then i would think the lenders have no collateral on their loan.. Would their be something in the mortgage that  the driller must retain mineral rights or must produce????

I'm just wondering  because lease expires next year .

thanks

Views: 696

▶ Reply to This

Replies to This Discussion

Permalink Reply by Freestar on October 17, 2017 at 8:41am

The lender does lose a portion of their collateral yes. You are probably one of hundreds if not thousands of leases that are used as collateral. Typically leases not held by production add little value to the collateral especially if the expiration of the lease is coming due in the near term. 

Permalink Reply by Barry D on October 17, 2017 at 1:37pm

In general, the principal of the mortgage is well below the valuation of the leasehold estates.

So if a few leases expire it may not mean anything.

As for the renewal of expiring leases, as in most areas, that depends on the success of the wells drilled and produced in the area.

Where is your property located? In particular, in relation to an Ascent well(s)?

Permalink Reply by adam sorell on October 17, 2017 at 4:38pm

i don't know where it is in relationship to any ascent wells. my property is off of cr 44 winding hill road about a mile off of w23st. I think there is some well pads further west on cr 44 being drilled but haven't heard of anything by me. I was one of the very last to lease. I got paid right before the bottom fell out. The mortgage is for 490 million dollars.

My friend lives on Hospital rd. Their 5 year lease with Rice was up in November.Rice sold/flipped it to Gulfport. Gulfport payed the bonus again in August to renew the lease for another 5 years.

Hope they don't drill. I think i heard the royalties are next to nothing right now.

Permalink Reply by adam sorell on October 17, 2017 at 4:59pm

 i forgot property is   in ohio pultney twn ship. there well that is 2 miles west of my property on the same road is  Wassman  well drilled by XTO. 

the numbers in first  quarter 2017  were 883,000 cf and 2nd quarter were 887,000cf . I think those are good output numbers???

https://gis.ohiodnr.gov/MapViewer/WellSummaryCard.asp?api=340132097...

Permalink Reply by Educate Me on October 18, 2017 at 1:59am

Curious to know if you were sent a letter notifying you that your minerals were used to secure a loan?

Permalink Reply by Bullfrex on October 21, 2017 at 2:37am

Adam,

Those production numbers are up there, but without knowing the months for which production was reported and some well details, one can't make a determination of the strength of the well output.

If you could post monthly numbers, it would be easier to make a assessment of the well's IP and the anticipated decline curve.

I will assume that this is a Utica well. Do you know the Total Vertical Depth and length of the lateral portion of the well? This matters because these factor into the overall cost of the well, and determines the profitability to the gasco.

In any case, this is an average to above average output for one Utica well in your neck of the woods. It would seem to be an encouragement to other E&Ps to at least test the waters there.

Best of luck to you!

Permalink Reply by adam sorell on October 27, 2017 at 3:33am

Ha. I'm lucky i was able to pull up the above link. It's all alien technology to me.

Permalink Reply by adam sorell on October 27, 2017 at 3:37am

I'm clueless. don't know how to get the info. But that DNR link says its Point Pleasant formation

Permalink Reply by adam sorell on October 27, 2017 at 3:31am

re educate me. Nope. No letters at all.

RSS

© 2024   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service