Buying Trumbull County

If you live in Trumbull County, Ohio you may have received offers to buy your mineral rights. Those offers have probably been quite low.

Buy low, sell high; Strike while the iron is hot etc. The folks behind these offers are attempting to take advantage of the disappointment of land owners in Trumbull County. Disappointment by the recent actions of BP and Halcon. They see an opportunity to buy mineral rights on the cheap and sell them later for extreme profits when the value of those mineral rights rise.

If someone is willing to buy your mineral rights then it must mean that they see future development coming. My suggestion is that landowners remain calm and exercise a little patience. Development will come.

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Permalink Reply by Dexter Green on July 15, 2014 at 3:53pm

The information that is submitted to the state and is included in investor presentations absolutely must be accurate.  Otherwise you're accusing these guys of fraud and the ODNR of complicity, or at the very least incompetence.  

Permalink Reply by Dexter Green on July 15, 2014 at 4:21pm

It's an awfully thin line you're walking when you accuse them of withholding information.  Beyond that, when they make a presentation to their shareholders they have to be straight with them and explain any reason(s) why the reported numbers don't match the reality.  I cannot imagine a situation where HK would purposefully mislead everyone about their results, take a hit to their stock price, then ride back in and start drilling all over again.  If BP and HK were once again actively leasing and trying to pull one over on people that would be a different story.  But right now BP is trying to get out with any scrap of dignity--and maybe a little cash--that they can and HK has halted all operations.  That isn't the behavior of a company that has plans to re-emerge and tell people "sorry, we got it wrong, we're back now". That just doesn't wash.

Permalink Reply by Joseph-Ohio on July 15, 2014 at 4:42pm

Don't go putting words in writing as if they came from me.

The words are yours.

Are you accusing me of something illegal by speaking my mind ?

The way I see it it's the industry and their lobbyists walking the thin line Dexter.

How do you know what the BOD at BP or HK decide to do with their business partners.

How do you know that they don't have 'Channel Partners' / Sub-Contractors that they entered the Play with and all of this is not a business tact ?

I don't know and am not accusing them of it but I do wonder if that couldn't be arranged / contracted to occur and don't see why it couldn't.

Maybe BP knew all along from the beginning that they were too big and had too much overhead to do all that was necessary to develop their acreage in the northern Utica and have what amounts to a sub-contractor arrangement with a 'Channel Partner'.  I've read about 'Channel Partners' on these very pages and have heard about it via discussions with various landmen who tell me 'Channel Partners' are real and do occur in the gas and oil business.  Do you know otherwise ?  I don't.

What do you think / know about such ?

Permalink Reply by Dexter Green on July 15, 2014 at 4:50pm

I think BP and HK thought they had a goldmine all to themselves.  I think they drilled some wells, got the sort of results that most of us expected, and now they're getting out.  Every shale play in history has gone that way.  HK may get lucky with some of their PA acreage as there is potential for an Upper Devonian bailout, but that doesn't change the facts that we have.  The numbers they've reported to the state and to their investors tell the tale.  Altering those numbers to make themselves look bad seems very unlikely and if they had channel partners putting together some leasing play you'd have heard about it.  Nothing stays secret for long in the oil patch.  Is there a rash of leasing in Trumbull and Mahoning counties that has escaped the notice of all of us?

Permalink Reply by Joseph-Ohio on July 15, 2014 at 4:56pm

As I understand their leases in Trumbull have 2 1/2 years to come to term.

I think a lot can happen in 2 1/2 years myself.

Could it be something like Slow Playing a poker hand but on a much larger scale of course ? 

Permalink Reply by Dexter Green on July 16, 2014 at 3:24am

It's hard to imagine that they'd fudge the data against their own interests in order to quietly find a buyer.  The biggest deals in the E&P business happen when a small, nimble company risked everything on an unproven field and scored big, then cashed out.  Whiting Petroleum just bought out Kodiak up in the Bakken because KOG had some great acreage and was small enough to be an attractive takeover target.  I think the same thing happens here in the Utica with Magnum Hunter.  

Permalink Reply by Joseph-Ohio on July 16, 2014 at 6:14am

Dexter,

For this record I didn't mention anything about '....fudge the data....'.

I wrote that developers control the flow / production from a well / multiple wells / a given geographic location to suit themselves; and then report the resulting production, which can't in my mind necessarily be applied as an assessment of the production strength of the well / the multiple wells / the given geographic location.

Permalink Reply by Joseph-Ohio on July 15, 2014 at 4:27pm

Look Dexter, I'm not accusing anybody, any gas and oil interest, any gas and oil developer, or the state of fraud or complicity to fraud, or incompetence; and don't go around implying in written word or spoken that I am - because then you are accusing me of something that is not true and a lie.

I'm saying that developers control the flow from their wells to suit their fancy and then report accurately to the state and their investors the resultant flow.

You got that straight ?

Permalink Reply by Joseph-Ohio on July 15, 2014 at 4:50pm

The production is what the developer controls it to be therefore numbers / data that's available is all and only what the industry wants to be made available.

Why would the industry want to tell landowners promising data ?

So we could bargain for more compensation ?

Everything the industry is doing is for the benefit of the industry / the developers and coming out of the hide of the landowner.

In Ohio these days, with new Force Pooling / Force Unitization legislation many unleased landowners have even lost their bargaining power as it now resides with the ODNR Oil and Gas Division Chief if and when he / she believes all co-relative interests are addressed.

So, it appears to me that there is no way for a landowner to make an intelligent  determination based only on the information made available (from the industry) and many times even the decision to lease or not to lease is made by others.

It appears that all a landowner can do is take what the industry and government give for the minerals resident within his / her land.

I encourage all landowners to become as knowledgeable as possible about the process and what happens to your lands / natural resources.

I don't like it, I don't think it fair, but, that's the way it appears to me to be.

Permalink Reply by jason irvine on July 15, 2014 at 2:49pm
I was responding to the post about buying and selling and how there are so many variables. I was also referring to a personal timetable.
Permalink Reply by MJ on July 15, 2014 at 5:30am

Thanks for posting this IMPORTANT topic Barry.  Many deceivers out there once again trying to put the screws to the unwary in order line their pockets.

Permalink Reply by Barry D on July 15, 2014 at 4:20pm

MJ,

There are even those who post on this site as supposed advocates for landowners. Their intention is to gain the trust of landowners only to manipulate them in the pursuit of  profit; buy low, sell high.

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