Comment

Comment by Bob Jenness on March 13, 2013 at 12:59am

Jesse,

"no one putting a gun..." does not a free market make. This is one of the most complex business deals you'll ever analyze, and the factors of the time value of the deal and market control are very atypical of other business deals we all know.  Our analysis of whether to "just say no" or not depends on both the prospects for a better offer down the road and our need for income from this "crop" we've already been stewarding (at some expense) for years.  It's one thing not to have control of a free market, and quite another to know that the party sitting across the leasing table from you does, in fact, control that market.  If we don't face that difference, we'll lose far more value than we'll ever pay the LOGs and/or any other middlemen for any help thay can give us towards freeing the market.

Comment by Joseph-Ohio on March 12, 2013 at 11:54pm

Bob Jenness,

Being the cynic that I've become, the two words I keyed in on within your last comment were 'landowner attrition' - what an ugly couple of words to describe a perspective taken by (I presume) the referenced O&G companies developing the Bakken Shale.

I'll try to read the article but I have no handy copy of the National Geographic March, 2013 issue.

Thanks for confirming what I've been sensing since this new O&G action in our geography began.

Unfortunately, most of the time it's been my experience that there have been good reasons for my cynical perspective to manifest.

Comment by Bob Jenness on March 12, 2013 at 11:27pm

To all Landowners...

If you haven't already seen it, please take note of the article starting on Page 28 of the March, 2013 issue of National Geographic.  This well-respected magazine makes a good attempt to describe the impact of O&GE&P on the land and people of the Bakken Shale. The 2-page photo and caption on page 30-31, in particular, treats the landowner side of the story.

A word of warning, though - I still have the issue of NG from a few years ago (after the invention of Horizontal Drilling and Fracking) where they judged the oil and gas industry as past it's peak with no foreseeable way to meet the future needs for new energy.  Like us, they're still learning.

I've read other sources which tell me that benefits to landowners have been minimal, since a very large percentage of Bakken land/rights was HBP or otherwise owned by O&G companies before the boom started.  It seems there was a long history of drilling mostly marginal vertical wells and waiting for landowner attrition.  Let's keep working hard to avoid this aspect in Crawford!

Comment by Bob Jenness on March 12, 2013 at 11:10pm

Sam and Joseph,

My landowner group has always urged me and all members to work as neighbors to link properties into logical sub-groups.  They may have also done some geological categorization, but they can't share it with all landowners because that may also share it with the competition.  Given the market power of the potential lessees, I welcome any signs of aggressively competitive behavior on the part of LOG or any other entity that will in any way free this market.  In fact, I believe that even if I become part of a super-unit ready to lease, I'd still benefit from the mere existence of an organization that represents the free-market interests of all landowners. We need ALL the help we can get.

Comment by Joseph-Ohio on March 12, 2013 at 10:43pm

sldouglass

If there is no one inclined to group smaller parcels into larger drilling units (and as I see it in my particular geography that seems to be the case) then there is no alternative but to form smaller drilling units and market them.

The advantage is taking an impossible circumstance and trasforming it into a plausible circumstance.

If the larger contiguous tracts are not congealing than there is no alternative but to do something else that will congeal.

I do agree that it would be most desireable to offer a larger tract - but in many circumstances it appears that no one is expending the required energy to do so or it is simply not possible given the existing conditions.

The majors may choose to group the smaller groups into a larger one once they form.

Right now in more densely parceled areas it hasn't been happening on it's own.

I think that there are times that if you want to get the ball rolling you have to improvise and try an alternative approach.

There's alot of issues working against efficient development.

Let's change the dynamic if we can. 

If we have to (and in many areas it seems that we do have to) let's change it from the apparent stagnation nurtured by confusion to something that has a measureable dynamic.

I'm ready to call in the U.S. Army Corps of Engineers and the National Guard if that's what it takes to get the infrastructure and development we need.

We've got a standing army - maybe it's time to put them to task rejuvenating our war torn economy instead of that of the 3rd world nations. 

Once again, only my humble opinions.

Comment by sldouglass on March 12, 2013 at 4:52pm

joseph-ohio
Just because your lance adjoins other land already leased does not suggest to me that there is any advantage to working with only a few landowners rather than many. The strength is still in the numbers. When the producers get serious it is possible that areas close to being controlled by a given company like Atlas or Range etc. would be dealt with as a group. Time will tell. That kind of grouping makes sense. Little groups set up by a few landowners make far less sense to me.

Comment by sldouglass on March 12, 2013 at 4:42pm

Know that while someone may lease the land that you put together for leasing that it is the operator who determines what land makes sense in a unit for underground operating purposes. Units are normally close to rectangular in shape and the shape and location is determined by the operator without regard to property lines. Unless a property is pretty small, it is likely to be in two or more operating units. Think of units as a series of football fields [of one or two square miles] each one abutting the next with parts of separate land parcels of several property owners in each unit.

Comment by gary smith on March 12, 2013 at 2:27pm

what if the geology in the center of your unit is wrong for the center? i  think the idea is good but you lack the seismic data.

Comment by petej on March 12, 2013 at 1:59pm

Joseph-Ohio,

Thank you for your response. We totally agree with your points.

You're right, the large for - profit groups have no reason to spend so much more time to make sure EACH landowner gets the best when they can make the same large profit in so much less time.

We have contacted and/or know nearly every landowner in our 640-1280 acre nnw to sse potential unit (s). At this point we are convinced we are making tremendous progress on a much smaller scale to the benifit of ALL of us then we ever could have in a larger group.

Again, landowners - THINK OUTSIDE OF THE BOX that the group mentality is leading you into.

We have been down that road and never will again! Do your own homework!

Township by township - start there.

Comment by Ken Snarey on March 12, 2013 at 7:29am

Hey Rex, Reply to my friend request and I would like to talk to you about your property before you sell it to anyone else.

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