Insights

Land Management, Leasing, Due Diligence

Whether you are a newcomer or well-versed in the oil and gas business, there is never a shortage of learning opportunities. In part one of our glossary, we compiled a list of some of the most popular terms, such as "Affidavit of Production" and "Non-Participating Royalty." In part 2 of our oil and gas glossary of terms, we highlight more commonly used words, along with their definitions.

1. Adverse Possession: Obtaining title to land by taking possession of the land and staying in possession for a certain number of years, as set by law. The adverse possession statutes vary by state, but share requirements that the rightful owner has had notice (actual or constructive), that the possession is open, and notorious (i.e., occupation in a manner that is open and obvious to the public)

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Land Management

There are many reasons a company may choose to outsource land work, ranging from a lack of bandwidth to a new startup without a land department. Land management companies can plug into your existing company structure, or provided independent land oversight and management. Here are the top advantages of outsourcing your land work.

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Acquisitions & Divestitures, Land Management

The San Juan Basin offers many investment opportunities, as it contains the largest coal-bed methane field in the world and ranks second in total gas reserves. This spotlight provides geological facts, current activity and things to know beforehand.

Background

The first oil well in the San Juan Basin spud in 1911, and since then over 40,000 wells have been drilled. Drilling activity was steady from the 1990s until 2008. In 2007, there were over 40 active rigs. Then attention turned to the prolific Marcellus, where gas could be extracted less expensively. In the past 12 months, 135 wells were completed in the Basin. The leading players include BP America, Hilcorp Energy Company, Catamount Energy Partners, and Encana Oil & Gas. 

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Insider, Land Management, Leasing

As veterans in the oil and gas industry, we know that learning the terminology is vital to navigating lease acquisitions and interpreting title research. Whether you are a newcomer or well-versed in the business, there is never a shortage of learning opportunities. At Cinco, we enjoy providing community and client education on the varied dimensions of land and title work.  We’ve compiled a selection of terms and brief definitions to conveniently help you refresh your knowledge.

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Land Management

When you are actively pursuing an opportunity in the oil and gas industry, whether it’s making an investment in an E&P company, buying minerals rights, or acquiring leases, having access to the right information and the right team to execute is critical from a value and timing perspective. While land management companies provide a multitude of benefits to the market, here are six greatest advantages they offer.

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Land Management

Land administration personnel are in demand again now that deals are happening.

This edition of the Texas Landman field update covers activity in Railroad Districts 1-6. Even though drilling activity has remained flat since my last report, oil prices have edged up close to $60/bbl and held firm above $55/bbl. The increase in  oil prices may be due in part to the Saudi’s keeping their promise to cut production until later next year to speed up the rebalancing of the oil markets. Of course, they may just be trying to boost the price of oil before their IPO of Saudi Aramco later next year.

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Land Management

Billions of dollars are exchanging hands chasing mineral interest and royalties.

This edition’s Texas Landman field report covers activity in Railroad Districts 1-6. Drilling activity has remained flat with 75 rigs in the Eagle Ford, 37 in the Haynesville, 20 in East Texas and 5 in the Barnett as commodity prices stay soft with oil trading between $45-50/bbl and natural gas below $3.00/mcf. During this time, there has been significant A&D activity in East Texas where companies are targeting the gas-rich Haynesville shale.

In our last update, we reported on CCI’s acquisition of Anadarko’s assets for $1bln which included its Carthage upstream assets of 160,000 net mineral acres and midstream assets. In July, Rockcliff paid $550MM for Samson’s Haynesville acreage comprising 210,000 net mineral acres and then acquired an additional 60,000 net mineral acres from an undisclosed seller. 

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Land Management

Successful dealmakers and investors understand the value of getting the right information to evaluate a new opportunity. Likewise, in the oil and gas space, having a solid understanding of a prospective investment play will enhance the quality of the assumptions and help set realistic expectations. This is particularly true when it comes to mineral title, land title and other regional title issues. An informed buyer will always conduct an assessment of title complexity, potential ‘red-flag’ issues, and the length of time it will take to confirm title.

Questions that should be asked, for example, are:

  • How old is the title and what kind of access information will you have to work with during due diligence?
  • What are the costs associated with title due diligence and title curative?
  • How hard will it be to obtain fill-in acreage or hold on to your acreage post-acquisition?
The answers to these questions will vary widely and differ from state to state, or basin to basin, so obtaining the targeted information is important.  Our regionally-focused teams across the United States collaborate with clients to provide this kind of insight at the outset of a deal and throughout the asset management process. The following highlights a sample of common title characteristics of three of today’s most active regions.  
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Land Management

For energy professionals and investors with limited experience in the business of oil and gas land management, the details can seem daunting, or worse, be treated as an “afterthought” to other steps in the E&P value chain. The simple truth is, diligent upkeep of your land and title matters will pay great dividends, both in the short and long term. Poor land management, on the other hand, can lead to loss of acreage, interference with operations and, ultimately, put you at a disadvantage when it’s time to sell your oil and gas assets. 

The following three factors help extract maximum value from an E&P investment:

1) the quality of the title you acquired,

2) the efficacy of your asset management program, and

3) your divestment readiness.  

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Land Management

What landmen should know about this quarter’s E&P transactions in Texas.

The field report for this current issue will cover activity in the Permian Basin, Railroad Districts 8, 8A and 7C, in addition to covering activity in RR Districts 1-6. The Permian is the most active basin with 339 rigs currently running. It is worth noting that in comparison to a year ago, the rig count in the Permian was 141 rigs, less than half what it is today. In a distant second, the Eagle Ford remains active with 75 rigs, followed by Haynesville 37, East Texas 20 and the Barnett 5. This explosion of activity in the Permian was created by massive investments from public and private companies because of the play’s superior economics and low commodity prices. However, Permian acreage comes with a continuous drilling commitment and if left unfulfilled, companies may lose significantly on their investment.

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