9000 unused oil leases. Inform me please.

E&P companies have had a bitch of a time getting the capital needed to develop. It’s not the only reason but a big one. Essentially, investors told them to get fricked after a decade of broken promises.

They ran out of truck nutz to hand out for each lease opening. Truck comes in Saturday.

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companies leased up acreage that they thought might be valuable

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Companies reporting gross acreage while ignoring the quality of that land and production potential is one of the less talked about issues. Investors are culpable in this as well for not forcing the issue and doing proper diligence.

It was the press secretary that said it. It’s why I said I wanted to learn more about it. Did you have anything to offer?

Thanks to those of you that replied. Sounds like special leases for exploratory work isn’t standard in the industry?

So the push for drilling on public lands. These would be exploratory as well or has exploratory work already been done that shows it’s productive?

You mean orphan wells? They’re old wells that were never properly plugged because the company went bankrupt or just ‘forgot’ about them. I’m not really sure how hazardous they are, but it’s apparently a big deal these days

Oil contained under a lease costs “X” amount to extract. If the price to extract exceeds forecasted price per barrel it’s a losin proposition. Also there is little confidence from oil firms that any investment into extraction under this administration that just told big oil to get fuked. Why invest in new tits for the wife when you know she’s leaving you in 6 months. The left is now radical left with no progressive plan for green energy. Oil companies won’t invest much with huge doubts in returns

The first thing an oil company does is secure a lease on land which gives them the option to drill. Companies typically lease more land than they expect to be productive. As they drill wells and the wells are nonproductive it condemns the land and no additional wells will be drilled. After a period of time the leases expire and are no longer valid. Another company can lease the land or more likely it remains unleased. The price of oil determines whether or not an area is economical. So areas that were once condemned can become potentially productive with an increase in oil price. Oil companies must be confident in the oil price several years in the future before they will invest in long term projects. That confidence does not exist right now.

Ok long but here you go and this is simplified..

We acquire spec seismic data and geological information ( seismic is like a sonogram but we can view geologic concepts 4-5 miles down )


We come up with an idea of where the hydrocarbon is trapped..

We lease the land quietly so we do not get into bidding wars for right to develop..

We the acquire more volume and detailed seismic data and come up with a plan. Often the plan shows we goofed and spent a lot of money on nothing.. others times the detailed data shows the target is smaller or in different places then we thought ( we get more leases to cover everything with expectations we will not drill on them all)

We come up with a plan to see if the prize ( oil trapped) justifies the cost of drilling..capturing..and producing it ( all cost ie flow it out.. build pipelines.truck it out.. dispose of produced saltwater that comes up with oil etc)

We go after it if economics make sense.. price of oil goes down…project falls apart.. this happened back when oil went below 40-50 dollars a barrel ….for unconventional plays where breakeven can be from 40-60 dollars a barrel..

Price of oil spikes… economics says lots of project now good… but we have learned from past… look at historic oil prices … they have fluctuated from 80 plus to below 20 dollars a lot and been burned by justifying project at 80 plus dollars to only have the Saudi’s get pissed and open their valves to flood the world with oil and drive the price down to put lots of companies and projects out of business..( their break even use to be a few dollar or less a barrel…. Retired so not sure what it is today… but very low compared to rest of world)

We way over lease land early… it is a risk required to capture rights to the oil… leases can go from hundreds of dollars an acres to tens of thousands later if concept is proven correct …

Price of oil can drop and we can suddenly be sitting on tens of millions of dollars invested in leases that are for hydrocarbon that are not an economic positive project anymore.

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E&P companies have had a bitch of a time getting the capital needed to develop. It’s not the only reason but a big one. Essentially, investors told them to get fricked after a decade of broken promises.

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Correct. The broken records on here want to blame all of this on a tiny fraction of drilling that happens on federal land.

Public and private energy copmanies vaporized about a trillion dollars of investor capital over the past decade with their preposterous over-promising on fracking economics.

They are still paying the price for that.