Thursday, July 26, 2018

A Reader Requests An Opinion -- July 26, 2018

For various reasons, I don't want to be more specific with regard to this issue.

A reader inherited mineral rights in one of the areas marked with an oval and labeled, A - E.

The other areas, numerically identified, are there for comparison.


The reader wanted to know whether:
  • it was likely the operator would be drilling any time soon in those areas, A - E
  • for areas A- E would be it better: holding for the royalties in the future, or selling now for cash, and forgoing future royalties (i.e, sell or hold)
My thoughts:
  • the area is northeast of Williston and has been seen to be a fairly good location, perhaps not as good as the best Bakken but certainly quite nice areas: East Fork, Stony Creek, Epping
  • each of those areas, in fact, from my point of view, have been great oil fields -- not something I would easily give up
  • the reader should note that an operator currently has a rig on #34465,  ]in the immediate area -- which suggests to me that operators are going to continue drilling this area
  • without mentioning the name of the operator the reader mentioned, I can say that of all the operators in the Bakken, I would be happy with this operator
  • daily activity reports suggest operators are getting more aggressive (rather than less aggressive) drilling in the Tier 1 locations in the Bakken) with the price of WTI trending up; and, choke points in the Permian making the Bakken look more attractive than the Permian
Every individual's situation is different.

My advice:
  • anecdotally, it's been my experience that folks who have sold their mineral rights in the Bakken, later regret it;
  • if one needs the money now, and has no heirs, selling the mineral rights might be the right thing to do;
  • if one does not need the money now, and has no heirs, I would still probably keep the mineral rights;
  • if one does not need the money now, and has heirs, I would definitely keep the mineral rights;
  • as the operator gets closer and closer to drilling this area, the offers to buy the mineral rights will increase and the offers will get better;
  • the reader should look at the production profiles of the recently drilled wells (permits in the 3XXXX range);
  • I am pretty confident that at some point, in each 1280-acre drilling unit, there will be:
    • a minimum of 6 middle Bakken wells
    • a minimum of 12 Three Forks wells, spread among the three upper benches
  • operators drilling in the Bakken these days generally have an expectation of EURs of one million bbls/well, certainly in the areas noted above.
I'm curious what others might think.

Reply anonymously in the comment section or directly to my e-mail address which can be found at the sidebar at the right.

Disclaimer: one has to assume that all readers who respond are simply providing an opinion and cannot be held "liable" for their advice. I don't see this as anyone, including me, giving any advice, simply giving an opinion.

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The Ledecky Page
or
How Can The AP Get Such A Simple Story So Screwed Up?

Katie Ledecky wins her second of two events.

Yesterday (Wednesday), Katie took first in the 800-meter freestyle.

Just minutes ago it was reported that Katie won the 200-meter freestyle.

200-meter freestyle (note this was from the linked AP site -- completely messed up):
  • Katie takes first, 1:55.82 -- that is the second-fastest time in the world in this event; Katie holds the world record which she set last month, at a time of 1:54.66
  • second place was won by three-time Olympian champion Allison Schmitt, clocking in at 1:54.60
Obviously the linked AP story has errors; waiting for corrections. [Wow, the AP story really appears to be "screwed up." See below, from SwimSwam].

Later: it looks like SwimSwam has it correct, regarding the 200-meter freestyle:
  • world record is held by Federica Pellegrini, 1:52.98, set in 2009 (if accurate Katie does not hold the record as stated above; confirmed at wiki)
  • today:
    • Katie Ledecky, first at 1:54.60 (which would be better than her June time of 1:54.66 if that is accurate from the story above)
    • Allison Schmitt, second at 1:55.82