Anytime you are driving through the countryside and see a drilling rig in the air, chances are the minerals transaction responsible for that activity happened more than two years ago. Furthermore, the drill site due diligence may have been in the works for several years by a Geologist, all kept very private.
The location of oil exploration is determined by various geology surveys including magnetic, seismic reflection and gravity surveys. The data are then compiled and evaluated, with an understanding of the area’s production history and objectively studied. The evaluation of the combined information will determine if an oil reservoir could be present, the potential output of the reservoir, its estimated lifespan and if the projected revenue numbers make sense to proceed.
Please keep in mind that to have a prospect location qualify for promotion, the Oil & Gas reserves that the Geologist has identified, must hold more potential product value than the development, drilling, lifting and operating costs combined, along with investor returns.
After a drill site has been qualified to become a "prospect location," the Landman gets involved by researching ownership and presenting contract offers. The Mineral Owners may or may not know anything about the oil business, the area’s current market terms and conditions, or what prices are being paid. All this, and the contract offer has a quick decision timeline with the threat of the Oil Company moving on to the next opportunity or "play" and not negotiating with you. The US L&M, LLC website and network helps leverage your ownership position by "pushing" your information and desire to receive offers into the market place. Your published information puts pressure on Competing Oil Companies to negotiate contract terms and prices at market rate.
More about the steps in a Mineral play...Once a site has been selected for promotion, the land must be surveyed to determine the boundaries and if any environmental studies are required. The Oil Company will need to complete formal mineral lease agreements, clear titles, permits and rights-of-way accesses, before drilling can begin. The location must also be cleared, leveled, fencing secured and any needed access roads and gates constructed. Because water is used in the drilling process, a water well will most likely be planned for. A reserve pit to dispose of rock cuttings and drilling mud during the drilling process must be dug and lined with plastic to protect the environment. If the site is in an environmentally sensitive area, the cuttings and mud must be trucked away instead of placed in the pit. The water source, surface damages and if a well is completed, the long term road access and ongoing maintenance are all elements of a surface damages contract between the Oil Company and the Land Owner.
Exploration for Oil is a lengthy and technical process, requiring extensive knowledge and research by many subject experts. The L&M, LLC website offers a go to network with answers to many of your questions, along with information and resources which are valuable to Mineral Owners, Land Owners and the Oil Companies. The website may save the Oil Companies time and money by identifying Mineral Owners who wish to lease their interests and finding opportunities, by identifying Mineral Owners that want to participate in their business. The Owners benefit by receiving competitive market rates for their leases and the opportunity to share and compare their offers, with their neighbors.