EV Energy Partners (EnerVest) from April 16, 2013 - Interesting Utica Info

Just found this while surfing.  Pages 10 and 11 depict their acreage held.  Page 10 talks about a 2% avg. override they have which the believe will generate $50M over 5 years.  Page 12 breaks down their holdings including Crawford Co. of 1,100 acres.   Page 13 breaks it down I believe the 'ORRI' percentages are the override they were referring to and its between 'Operated' and 'Non-Operated'.   EVP believes the money is in the Utica, so we need to negotiate the best leases possible for ourselves.  Enjoy the presentation....

 

           http://ir.evenergypartners.com/events.cfm

 

 

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Markkot- Thanks for the post. Now all we have to do is find someone to negotiate with which currently seems to be the biggest problem. 

good find, Mark,

It seems like every time I start to think I understand this business, something like this crosses my radar screen.  I hope this gets some dialog, because there are so many things about it that I don't understand that I don't even know what questions to ask on first reading.  Anybody out there have any direct experience with EV?

It just irritates me as to how many people put their hands into your pockets.  Gov't with the taxation, 'snakes in the grass' with their royalty overrides.  Let alone, needing the patience to allow the time for the exploratory wells to move in our direction.....

So a "royalty override" is basically just a markup from the original landman's high-profit lease to fair market rates?  I apologize for being slow on this one, but I just don't have time to study it right now due to demands of the "real" market.

If that's the case, then at least we can use it as a discussion point if ever offered a lease.

Frustrating as it may be, a quest for someone to lease your property is not likely to be as beneficial as you might like. Continue your search if you need the cash, but be assured that a serious producer WILL FIND YOU. And when that occurs that is the time to think about negotiating. The producer, at some time, will NEED VIRTUALLY ALL PROPERTIES in order to fully develop adjacent and nearby properties.
Rich as they are, producers operate with budgets and they will direct attention first to properties that are likely to bring the greatest properties. There seems to be every reason to believe the properties in Crawford County and environs are attractive. However, the potential reserve is measured in thousands of square miles offering drilling opportunities for at least a century. Markets are just beginning to develop for the vast resource and infrastructure is in its first stages. It seems that the Utica shale offers the most opportunity at the moment and the principal development appears to be beginning in the south [eg Cadiz Ohio where a billion dollar plus plant is under construction for separating wet gas into its several parts. There is talk of an ethane plant to produce plastic but at the moment, but at the moment they are shipping ethane gas to TEXAS !! of all things.
In the meantime, you will hear from opportunists putting together land areas for later sale to producers. It is further complicated by the fact that Range and Atlas may have sufficient old leases to control areas so that any other producers are reluctant to come in and lease unleased adjoining tracts.
Eventually, it is thought that a large group may have enough of the acreage to be in a position to negotiate. NWPA group, run by fellow landowners, does not take a cut of what would otherwise go to the landowner. It asks for a little money up front to keep its activity going until they can locate a serious producer.

Interesting. sidouglass. Yes, it would be problematic if properties were indeed 'tied up' by old Range or Atlas leases, but...

...WHAT IF the 'lease' RESERVED drilling depth BELOW 'x' depth (i.e. Marcellus+below) for the FUTURE DRILLING possibilities? Even though there are 'shallow wells' on a property, WOULD the below 'x' depth still able to procure leases unto itself possibly? 

Also, IF a property was substantial enough to 'carry it's own weight' (being more than a possible contiguous square mile in various 'blocks')...would it 'hold it's own' in merit to be 'worth it's while' to address?

In such a case WILL a 'potential serious producer' FIND YOU?...or would the 'courthouse searchers' just see that & say to themselves, "Oh, that land is leased already."; and just move on? I would assume that they are just SO busy going over things in quick manner that this might be the unfortunate case. If it were YOU, what would YOU do in such a situation?...it's seems advantageously perilous, yet protected.

I wonder whether EV Energy will consider selling its PA acreage after it is proven up?
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http://www.ohio.com/news/ev-energy-partners-negotiating-sale-of-103...
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EV Energy Partners negotiating sale of 103,800 acres in Ohio’s Utica shale
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Looks like its stock was listed on the market about 2006 - possibly relatively new?

ORRI come out of the operator's interest. A ORRI owner pays no costs.

No secrets, it is a commin instrument in making deals.

 

Some cos sell a position and retain an ORRI .

thanks, melissa..    I had no idea what it was even related to..   But it's gone now, and that's great.   My atty told me it went away when the lease was released back in July.

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