Updates
November 26, 2016: the Monterey Shale is "much ado about little."Harold Hamm: there's a reason the Monterey Shale is not being developed.
Original Post
A reader sent me the results of the recent Califonia/BLM lease sale in Monterey County. It speaks volumes how incredible this field is:
West Coast Land Service, Bakersfield, paid the highest total bid price, $23,200 for a 2,320-acre parcel. That was also the highest amount per acre at $10 per acre. The parcel is located in Monterey County.It looks like the BLM almost had to give it away, or pay someone to take if off their hands, and hope royalties would cover the loss.
For newbies, acreage in the Bakken is going for $5,000 to $15,000/acre.
Eog's first round of mountrail Cty leases probably most of 2007 even into 2008 (10s of thousands of acres or more) contained the following terms : 25$ bonus and 1/8 royalty.
ReplyDeleteInitial leasing in unestablished production areas is not necessarily indicative of future production results. And if you have been paying attention, oil cos pay the absolute min for leasing especially when wildcatting. As it should be.
You are correct. Even as recently as 2010, leases were still quite inexpensive in the Bakken in some areas. So, we'll see.
DeleteI'll tag this post to follow-up in 2016 to see how the Monterey Shale is doing.