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iLandMan Shares Technology with Colorado Mesa and UL Landman Programs

Lafayette based lease acquisition and land management software company iLandMan continues its commitment to education by presenting to Colorado Mesa University and University of Louisiana landman program students again this year.

Colorado Mesa University

Richard Hines, iLandMan Vice President, co-founder, and Certified Professional Landman (CPL), gave special class presentations to landman students late last year in Grand Junction and earlier this year in Lafayette.

University of Louisiana Lafayette

Organized by Steve Soychak and Bryan Hotard in Grand Junction, and Oliver LeBlanc in Lafayette, Mr. Hines shared with the students his experiences as a landman, how the industry began and has evolved, where it is today, and technology changes he sees for the future of the industry. Students were also given the opportunity to view and train on iLandMan’s tract-based online land system by entering tract and lease data as well as mapping tracts.

“I always enjoy presenting to these students and seeing the looks on their faces when I share stories from my days as a landman” said Hines. “It’s also exciting to train a new batch of young landmen/women using our technology knowing that they will bring these skills out into the field.”

Richard Hines Energy Management Class

Along with his role at iLandMan, Hines has over 30 years’ experience in the land industry, served as Third Vice President of the American Association of Professional Landman (AAPL), was Chairman of the Certification Committee, served on the Website/IT Committee, and is the current Chairman of the Technology Committee. He was the recipient of the 2008 AAPL Best Director’s Communication Award.

If you have any questions about iLandMan, or want to set up a demonstration, please give us a call at 1-855-445-9629 or fill out our contact form.

NAPE Summit – 2016

NAPE Summit 2016 is in the books and it was one heck of a show! Last we heard there were over 11,500 people in attendance and the convention center floor was buzzing. Our team was happy to be busy answering questions and doing demonstrations all day long.NathanGreneaux

Catching up with old friends and spending some time with our clients was also a welcome treat. We were especially proud to see over 20 of our customer companies with booths at the show, many of which came over to say hello.SarahCaldwellChrisGraham

For the second year in a row, we were lucky enough to have a group of aspiring young oil and gas professionals stop by the booth from the Oklahoma University Energy Management Program. Our very own OU alumni Hank Latimer was more than happy to talk shop with them and share some iLandMan insight.OULandStudentsHankLatimer

Stay tuned for more updates on our upcoming events, wherever they may be!

If you have any questions about iLandMan, or want to set up a demonstration, please give us a call at 1-855-445-9629 or fill out our contact form.

For more pictures from this great event, check out the gallery below or view the album on our Facebook Page where you can tag yourself and your friends.

Oil Crisis: Investment Dream or Acquisition Nightmare?

Buying low and selling high in this market only works if you know the TRUE value of your acquisition.

Nobody, and I include myself, can predict oil prices for the immediate future. However, I do have another type of prediction…more new domestic oil and gas companies will be formed in the next five years than in any similar time frame in the history of the United States. This is for one simple reason, at these prices, oil is the safest investment simply because it is well below its replacement cost. If you look at the true full cycle cost of development and production, today’s price means that it is not possible for the U.S. to sustain exploration even at its present low level. No new exploration means no new reserves and less future production, which eventually leads to lower production and higher prices. So buy low and sell high.

I am not the only one who believes this, which may be why we see record amounts of capital gathering on the sidelines, waiting for the right investment opportunity. So the question is, what should you buy?

In working with our clients to help evaluate acquisitions, here is what we’ve discovered: A typical acquisition in the shale consist of a scattering of wells and leases across a broad area. Pooling agreements usually determine the working interest (expense) and net revenue interest (income) on each well based on tract acreage contribution to the “production unit”. This means that one acre in this unit has a separate and distinct value that is different than one acre in another unit, in the same area, and even on the same lease. The value of each acre is dependent on where it is located, what depths/horizons are part of that acre, how much is developed, and how much undeveloped is remaining. When buying acreage, you need to know how many more wells can be drilled within that unit as per the pooling agreement, as it is now common to see multiple wells drilled within any unit.

Recently we came a across a situation in which the oil and gas lease contained two adjacent tracts of land on the same lease, each tract was in its own separate producing unit for the Haynesville shale formation. One of the units had six producing wells (fully developed) and the other tract had one producing well (five potential additional locations), all drilled during higher gas price years and within two years of each other. Production and depletion for all of the wells was similar, so the depletion type curve, EUR’s for each well, cash flows, and remaining present values would all be the same. One might assume that based on today’s commodity price and the fact that no new wells can be economically drilled, that the value of each tract is based solely on the value of its current production. This assumption would be a mistake, and here’s why…

The unit with six wells is “fully developed”, meaning the reservoir has been fully developed and no more wells will be drilled in that unit, regardless of future commodity price. However, the tract in the unit with only one well drilled and producing can offer five new locations, when prices recover. So the value of the “underdeveloped” acreage has a greater income potential than the fully developed acreage. Think of the undeveloped acreage as an open ended call option. Meaning that at some time in the future, as long as the lease/tract is HBP, the owner of that lease has the right, but not the obligation, to drill additional wells. So, if and when commodity prices rise, the “undeveloped” tract becomes more and more valuable.

Also, it’s important to be aware of which leases have depth/horizon severance issues as well as horizontal and/or vertical pugh clause issues. With this awareness, you can determine what you can keep and what you will lose, as well as how much to budget for future payments and when to pay them.

The key to doing intelligent and effective due diligence and evaluation of an acquisition is to look at and value each tract of land, considering its present EUR and future EUR potential. As prices rise, the tracts with the least amount of developed producing wells will have a greater increase in value than those tracts that are more fully developed.

Tim Supple 2, President of iLandMan

With today’s database and GIS technology, this process can be simple, fast, and well worth the investment. Otherwise, I honestly do not know how anyone can truly be knowledgeable and competitive in acquisitions in today’s environment.

Tim Supple – President – iLandMan