Wondering about your thoughts on the low bonus amounts for Slope County at the State auction yesterday? Especially compared to bonus' paid at the Aug. 2011 auction.I replied to the comment but knowing that some folks may not read the comments, here is my unedited answer:
With leases, two things: location, location, location; and, timing, timing, timing.My unedited reply is open for discussion, if folks think I'm off base.
First, timing, easier to explain: there are other reasons with regard to timing, but the CHK issue is foremost. Not much more needs to be said.
Location: compare the location of the tracts in Slope County in this auction with the locations in the August, 2011, auction. The "high" bonuses in the August auction in Slope County were in tracts where seismic activity suggests high rate of success; the tracts in this auction, do not. (In both auctions, the tracts in Slope were outside of any designated fields.)
Even within the same county, disparities in bonuses can be significant. Look at the bonuses paid in this auction in Mountrail County. In Mountrail County some tracts went for $10,000/acre; some went for as little as $50/acre. That alone is incredible: $50/acre in Mountrail County, one of the most prolific counties, but it is obvious the prospects are not good on the eastern half of Mountrail County.
One can easily see the results of the state lease sales at this link. Use the drop-down menu to supply the date and submit.
