In my last update, I opened with “there seems to be light at the end of the tunnel as oil and natural gas prices are moving up and there appears to be a lot to talk in Washington about using natural gas as the “bridge fuel” of the future”. Well, with the recent purchase of XTO by Exxon, the “talk” has turned to the “walk”. Of course, this will not be the last large acquisition or merger of a company with large domestic unconventional gas reserves by companies like Exxon with deep pockets. This is great news for the domestic energy business and especially for landmen. In addition, gas prices continue to rise to $5.60/MMBTU, gas storage continues to shrink and North American rig rates have increased to 1131. So what does this mean for landmen working in Texas Districts 1- 6, we expect to see activity increase in the shale plays like the Eagle Ford, Barnett and Haynesville as well as the tight gas plays like the Bossier and Cotton Valley.
In RRC District 5(Barnett Shale), XTO is the most active operator with Chesapeake and EOG not far behind. There have been several transactions in the Barnett by companies selling down their interest or selling out of the play entirely for other areas. Companies attempting to buy or renew leases report walking away from areas where the landowner’s or municipalities terms are too onerous. This includes acquiring rights-of-ways for pipelines.
The activity in RRC District 6 for the “Texas Haynesville” has escalated with the recent discovery by Devon of its The Kardell Gas Unit 1H well that tested at 30.7MMCFD. The courthouses in the area are packed with landmen running title and preparing runsheets. Samson, Anadarko and Cabot lead the way in development of Cotton Valley/Travis Peak reservoirs. In the Deep Bossier Trend XTO, EnCana and Gastar continue to develop the play but at a slower pace.
In Deep South Texas, drilling activity revolves around the conventional Wilcox and Vicksburg formations and the unconventional Eagle Ford. Leasing activity in the Eagle Ford is brisk with new companies entering the area every week. The number of rigs drilling in the Eagle Ford has increased with Petrohawk, St. Mary’s, and EOG leading the activity. Other companies with significant acreage in the trend are ConocoPhillips, Murphy, Hunt, Common Resources and Pioneer.
The size and number of field land crews is starting to increase slowly. We expect to see companies like ours that have established renewable energy and Rights-of-Way groups, train and hire more landmen to work on its wind and ROW projects over the next 12 months. In-house landmen, with contract experience and management experience are still in demand and their rates range from $60.00 to $75.00/hr depending on whether or not the project is due diligence or higher levels of land work including negotiating and drafting agreements or managing in-house projects.
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