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Permalink Reply by Mark on March 17, 2021 at 12:03pm

Susie,

Did some checking on Callon's activities in LaSalle County.

First off, Callon did not purchase Carrizo but instead the two companies merged in what was probably a stock deal. And the "new" company post merger is Callon. They have close to 500 operated wells in LaSalle County and have completed almost 70 new horizontal wells in the past 500 days. As well as permitted over 20 new permits in that same period.

So no doubt Callon is treating this area as a valued asset.

I have attached Callon's most recent operational presentation (for 4th Quarter 2020). Lots of info but you can see that their Eagle Ford assets (which includes LaSalle County) is one of three main asset areas (the other two being the Delaware and Midland Basin in the Permian Basin of West Texas).

Their 2021 "plan" appears to indicte keeping 3 rigs active drilling new wells - one could assume that means one rig in each area.

So capital is being laid out for Eagle Ford drilling. But the big question is which new wells will be drilled and in what order (as well as timing). This is impossible to address from my perspective. I have to figure that Callon's team has been looking at the performance of all the wells in the Eagle Ford as to their respective economics. And a new well drilling plan developed based on those economics.

I figure that sonewhere in the Callon planning group is a "drilling schedule" that projects out for eyars as to which wells / units will be drilled. And this schedule will not be shared with anyone outside of the Callon management team.

So will your acreage be drilled up? Probably yes. But when? Who knows is the best that I can say right now.

Hope this helps some.

Attachments:

• 4Q20 Earnings Deck_vF_Feb 24_220pm.pdf, 850 KB

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Permalink Reply by Susie Kief on June 5, 2021 at 2:19am

Hi Mark,

I’m glad you wrote back! I didn’t know it though since there was no notification. It seems that no one is posting much here anymore. What do you think the prognosis is for oil in general with the debacle of negative value for oil? It’s rebounded, but it seems that things have changed. What is your take? It looks like they have only gotten permits for a couple of wells in La Salle County since the beginning of the year. 

Also, there are very few offers on mineral rights coming in these days. Your take on that?

Susie

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Permalink Reply by Mark on June 6, 2021 at 12:28pm

Hi Susie,

Sad to say but this site like all the other discussion sites I have been involved with in the past 10 years is dying a slow death. Lack of interest plus unawareness that this site exists are two key factors. Plus I believe that some people who could really benefit from this and similar sites are tentative to post for various reasons (e.g. not wanting to look uninformed, not knowing what to ask, etc.).

Hope you are doing well before getting into your questions.

Oil in general???

Despite the negative spin on oil and how "bad" it is, I personally believe (as a 68 year old retired O&G geologist) that oil isn't going anywhere. The economy needs oil to survive - even with the trend to "net zero", electric cars and other things. Too many products need oil to be "active and alive". That being said, I don't subscribe to the $100 oil projections some people are touting. Oil in the $60's is a good place to be for the industry. There will be highs and also some lows - perhaps even spikes to the triple digit range. But I think we will see oil in the $70 range in the next 12-24 months. Price trends are "slow" to change overall - ignore the spikes.

Of course, an oil tanker getting sunk in the Persian Gulf would change a lot of pricing projections. Hope that never happens for a lot of reason.

Mineral rights offers???

I have seen the same - this business was going nuts and active as all get out prior to the negative spin on O&G companies. Lots of investment money was getting into buying mineral rights with the idea of cashing in down the road when wells were drilled. As well as baiting mineral owners with low monthly royalty check income to "cash out" now in return for a bigger pay check right now.

Like any industry, many of the investment groups that jumped into this game have backed off, but the main and steady mineral rights buyers are still out there - just with less money to do their purchasing. I expect to see this base group of buyers continuing to make offers and try to pick up mineral rights. Offers may not be as high but they will continue to reap good returns as they get some owners to finally "sell" after months of low royalty checks.

Lack of new drilling and permits???

The situation in many areas of the oil field right now (and especially in "shale" plays like the Eagle Ford, Permian Basin, North Dakota, etc) is that the early rounds of drilling have tied up the acreage and that there is no urgency for operators to drill new wells to maintain their acreage positions (and not lose it).

Here is a good example (I think) - a 10,000' horizontal well will be drilled on an acreage unit that will "hold" 640 acres. i.e. that 640 acres is "held by production" by this 10,000' horizontal well. Being HBP means that the acreage will NOT expire until the well stops producing - which may be 20-20+ years down the road.

This 640 acres has room for 3-4 additional wells at the same horizon as the first 10,000' horizontal. As well as has ALL of its shallower target zones HBP and retained by that first well. So no need to spend capital to drill new wells to retain the acreage unless the operator really wants to drill.

Without this urgency to drill, why spend money at low oil prices? Wait for higher prices to drill and make more money down the road. Also hold onto undrilled acreage which equates to being a more attractive target to potential buyers (who will want to buy proven but undrilled well locations).

Another good example ..............

I own royalty interest on some Eagle Ford acreage in Karnes County. Pioneer drilled 3 horizontals about 6-7 years ago. These wells gave me about $80,000 in royalty payments over the years with high monthly payments in the $10,000 range. But these monthly payments had gotten down to less than $100 per month. I got tons of offers to sell my minerals - but held on knowing that there was room for more wells to be drilled.

Ensign purchased Pioneer about two years ago - and finally drilled four new wells on this acreage.

These new wells came on line about 2 months ago - and my most recent monthly check was over $11,000.

One has to remember that these activities in the field are long term projects - nothing happens quickly but things will happen in time.

Hope this all makes sense

Mark

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Permalink Reply by Susie Kief on June 6, 2021 at 11:25pm

It does make sense and I think I’m doomed. I should have accepted a pretty good offer I had a couple of years ago. Because there is room for ten more wells, my cousin talked me out of it, thinking we were going to make millions. I’m not getting enough monthly and I’m retired. Coulda shoulda woulda. Thanks, Mark. Your knowledge is amazing and I’m very appreciative. 

Permalink Reply by Mark on March 17, 2021 at 12:16pm

Susie,

This is third time I am trying to enter this note / problems with this site and my computer I guess.

The Callon / Carrizon deal was not a purchase - the two companies merged (probably in a stock deal)  and are operating under the Callon name.

They have almost 500 active wells in LaSalle County. With cose to 70 new horizontal completions in the past 500 days. And over 20 new permits during that same period in LaSalle County.

Callon has three main areas of operation - the Eagle Ford and the Delaware and Midland Basins in West Texas. All these areas are competing for financial capital to drill new wells.

The question for any area is the timing of any new drilling. And this will be based on the economic analysis of the existing wells in any HBP area. The better performing areas will merit additional drilling sooner than less well producing areas.

So the issue on new drilling in your area is the WHEN factor.

Hope this helps some.

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Permalink Reply by Mark on March 17, 2021 at 12:18pm

Attached is Callon's latest investor presentation (4th Quarter 2020). This is public information on their website.Lots of information here but it does clearly show their three areas of operation as I noted earlier.

Running a total of 3 rigs in 2021 - this may be one per area.

As noted earlier, competition for finances internally in Callon as they try to effectively develop their assets.

Attachments:

• 4Q20 Earnings Deck_vF_Feb 24_220pm.pdf, 850 KB

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Permalink Reply by Susie Kief on August 28, 2015 at 8:32am

I heard that only 100 of our 402 acres are included in the Anderson wells. Carrion is our operator. Does anyone have a way to confirm this? The two wells were fracked in May.

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Permalink Reply by Susie Kief on August 28, 2015 at 9:18am

I mean Carrizo is our operator

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Permalink Reply by Mark on August 28, 2015 at 10:25am

Look on Tx RRC site for this well and  you will find the unit plats plus other paperwork that shows the unit and associated tracts in the units.

Anderson 28H is 42-283-35216

Anderson 29H is 42-283-35217

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Permalink Reply by Susie Kief on August 28, 2015 at 10:53am

I tried but if that's the lease number, it said that it was invalid. Can you help?

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Permalink Reply by Mark on August 28, 2015 at 11:54am

That is the unique API number for the wells.

Let me check Tx RRC to see what I can find

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Permalink Reply by Mark on August 28, 2015 at 12:05pm

Use this link below and enter the last 8 digits of the API in the "API number" in upper right hand corner. So "28335216"

This takes you to the permit info for the individual wells - no completion info filed yet/

I pulled down the P-12 and Unit plats for both wells - two different units and associated acreage.

You can compare this to your acreage / lease to see where you stand in the unit.

http://webapps2.rrc.state.tx.us/EWA/drillingPermitsQueryAction.do

Attachments:

• Anderson Wells.pdf, 828 KB

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