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little frau

Eagle Ford Shale formation

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Here again, I'm unable to post in the political thread where shale oil and gas was referenced so I'm just tossing this out there. (I am slowly getting to that 'required posts' level)

But as Samagon pointed out, shale oil and gas is down there and there is a lot of interest in it in South Texas.

El Paso Corp. EOG, Shell and others are already in the play. The Eagle Ford shale formation is a cresent moon shaped area extending from the Mexico border up through several counties from Dimmitt, LaSalle, Atascosa, Karnes, DeWitt, LaVaca and points northeast.

Yes, it is a deep formation but the companies (or landmen) who have been working our area say they are prepared to go the distance. The activity right now seems to be more south of I-10 but leases are being secured moving on to the counties north of I-10 also. There are several pipelines in our area, just waiting, and a neighbor received a letter of notification that another is to be laid over part of her property. Per the RR Commission site, many of these leases are for 'oil or gas'. One landman told us that whichever they hit first is what they will work first.

We've personally been contacted by 5 different companies. Three of those quickly pulled out due to the competition. We have not signed as yet. When we do, the up front bonus money will be enough to get me to move out of Houston.

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A friend of mine suggested trying to put a clause in leases that gives the minerals owner a percentage of the proceeds the lessee makes if it sells the new production to another company. For example, you get $x per acre for the lease, plus annual rentals. Gas is discovered, and you get 20% royalty on that. The original lessee sells the project for $50 million, with $5 million attributable to your property. A 5 or 10% chunk of that sale price would be a nice addition to the coffers.

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DRILL. The deeper the better. The more the better. Get as much out of this planet as we can as soon as possible. NOW.

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A friend of mine suggested trying to put a clause in leases that gives the minerals owner a percentage of the proceeds the lessee makes if it sells the new production to another company. For example, you get $x per acre for the lease, plus annual rentals. Gas is discovered, and you get 20% royalty on that. The original lessee sells the project for $50 million, with $5 million attributable to your property. A 5 or 10% chunk of that sale price would be a nice addition to the coffers.

Interesting idea. I'm not sure if the property owner would even be privy to that information, at least initially. It might be a good question to run by our O&G attorney.

With so many acres in play and so many owners, I'm less than optimistic that we will see a rig on our property.

My point in posting was in reference to the thread about safe energy alternatives where someone mentioned deep drilling in shale formations and how it is more difficult to produce in these situations. The activity in the south Texas Eagle Ford formation began before the BP explosion but seems to have gotten more intense since.

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