It’s Convention Time!! When you receive this newsletter, OK NARO’s Annual Convention will be about a month away. The theme this year is “Stewarding our National Treasure.” We are expecting royalty owners from all over our great state and many from across the country as they seek to better understand their mineral interests. I’m especially excited about the tremendous slate of presenters retained. No matter what your knowledge level may be, everyone will take home new information from the 2016 Convention. So register today to attend the convention at the Southern Hills Marriott in Tulsa, Oklahoma! I hope to see all of you on April 27th , 28th and 29th.
Knowledge gained at the convention helps our understanding of the oil and gas industry as a whole. At the time of this writing, the price of oil sits at $38. Oil has been creeping up over the last couple of weeks. Does this mean that the market has bottomed out and we on the way to recovery? I’m not sure anyone knows the answer to that question; however, there are some positive signs, at least in my area of the state. There are still companies wanting to lease minerals and starting bids are in the $1,000 per acre, 3/16ths, 3 year term. And, most of the companies will give depth, Pugh and commencement clauses.
One thing is clear, we are entering a new phase in the oil and gas industry that will include horizontal drilling as a huge factor in the production of oil and gas. Oklahoma sits on a tremendous amount of oil and natural gas that is locked in previously untapped shale reservoirs.
We once thought that the Middle East controlled our destiny due to their grip on what we once thought to be finite oil reserves. The rise of horizontal drilling has leveled that playing field and greatly reduced the United States’ dependence on foreign oil.
Which brings me to this past week, when Oklahoma lost one of its largest figures in its oil and gas industry with the passing of Aubrey McClendon in a tragic automobile accident. McClendon was a co-founder of Chesapeake Energy in the late 1980’s. With the advent of horizontal drilling, McClendon grew that company to a multi-billion dollar company. He was forced out of Chesapeake by its board of directors in 2013. He then founded American Energy Partners to continue his lifelong pursuit of finding and developing oil and gas fields.
The day before the accident, federal antitrust authorities accused him of conspiring to rig bids for oil and gas leases. A civil lawsuit has also been filed in northwestern Oklahoma for bid rigging that names Chesapeake, McClendon’s former company, and Sandridge. Rumors abound on the matter and I guess all of that will play out in the future.
McClendon had his supporters and detractors. However, no matter where you stand, Aubrey McClendon was a game changer over the past 30 years, forever changing the landscape of Oklahoma’s oil and gas industry. Boone Pickens may have put it best when he said, “No individual is without flaws, but his (McClendon’s) impact on American energy will be long lasting. He was a major player in leading the stunning energy renaissance in America.”