We have such a glut in natural gas I do not see a return to the prices of fifteen years ago. Oil, on the other hand, will necessarily be in high demand. With the so-called \u201cTier 1\u201d acreage being oil doesn\u2019t mean it is all oil. From my calculus for a number of wells, it seems that these so-called \u201coil wells\u201d are mostly natural gas which only adds to the problems of selling a deal or developing wells in \u201cdry\u201d gas basins like the Fayetteville Shale.\u00a0 The associated gas with the oil drillers is what is causing a glut in the market. I suspect we will see flaring abolished in the next year or two as well plus new restrictions on fracking on federal land. Fracking as defined at the BLM includes those acid treatments that have been done for decades in vertical wells. There are 20 steps to “fracking” a well under BLM leasing. Expect more with the rumor that the BLM is dragging their heels in anticipation of many changes to the regulations under the new administration.<\/p>\n
Meanwhile Flywheel again in the December Arkansas O & G commission meeting applied for extensions to wells to avoid having to abandon them. It is time to put up or shut up. These wells need to be challenged and mineral owners should go to the meetings and demand action. Your lease is being extended with the likely outcome years from now that you won\u2019t see a dime and they eventually will walk off anyway. You can submit objections to the commission on line. http:\/\/www.aogc.state.ar.us\/hearing\/object.aspx<\/a><\/p>\n Meanwhile in S. Arkansas, First Ascent is proposing a 4000\u2019 \u00b1 long lateral well. To drill the well they need to integrate the Nacatoch Formation. I don\u2019t know if it is approved yet as it involves a huge number of unleased tiny interests near the old Hibank Field.\u00a0 They are proposing $125 per acre with a 3\/20th<\/sup> royalty or $150 with a 3\/16th<\/sup> royalty or finally $100 with 1\/5th<\/sup> royalty for parties being integrated.<\/p>\n That\u2019s probably as high a royalty and bonus offered in some time in Arkansas. In fact, the commission hasn’t met monthly simply due to the lack of issues to address. And they are anxious for activity to resume as they also need to justify their own existance. Hopefully that is only going to get better with time. The well will cost about $1 million to drill (dry hole cost) and an additional $1 million to complete if potentially productive.\u00a0 If successful, it could well be a mini-boom in the region.<\/p>\n","protected":false},"excerpt":{"rendered":" We have such a glut in natural gas I do not see a return to the prices of fifteen years ago. Oil, on the other hand, will necessarily be in high demand. With the so-called \u201cTier 1\u201d acreage being oil doesn\u2019t mean it is all oil. From my calculus for a number of wells, it seems that these\u2026 Read More »<\/a><\/span><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1236","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/posts\/1236","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/comments?post=1236"}],"version-history":[{"count":1,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/posts\/1236\/revisions"}],"predecessor-version":[{"id":1237,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/posts\/1236\/revisions\/1237"}],"wp:attachment":[{"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/media?parent=1236"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/categories?post=1236"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.roxnoil.com\/wpadmin\/index.php\/wp-json\/wp\/v2\/tags?post=1236"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}