Last month’s article was focused on the value of GIS (Geographic Information Systems) or “smart” maps to mineral owners. I focused on two common uses for GIS data of value to mineral owners- Activity Monitoring and Due Diligence. In this posting I would like to delve deeper into the topic of Due Diligence and help you strengthen your negotiating position by incorporating GIS data into your research.
First, let’s look at due diligence from the perspective of the mineral seller. In next month’s post, I’ll focus on the mineral buyer’s perspective.
In a previous post, I emphasized the importance of LOCATION to nearly everything we do in the oil and gas industry. The process of conducting due diligence is especially location-driven and therefore, perfect for the integration of maps into your data gathering efforts. For example, let’s say you have a few offers for minerals you own or manage. The location of those minerals relative to current (or future) development and production locations can have significant impacts on the amount and terms of the offers you receive as well as potential future royalties.
You probably already know some of the key questions you should be asking when considering offers, but which ones could you be asking of GIS and visualizing the answers on a map where the activities surrounding your mineral asset would be evident? Posing some good “where?” questions such as these will get your off to a good start:
- Where have spacing or pooling orders been issued near my mineral acreage?
- Where have drilling permits been given in the surrounding area?
- Where have the newest wells been drilled and by whom?
- Where are the top producing wells surrounding my area?
- Where are the top operators relative to my mineral acreage?
So, where might you find freely and readily available data and maps for due diligence research? I’m sure most of you are already aware of the Oklahoma Corporation Commission’s oil and gas databases, but did you know they also have an interactive map containing much of their well data?
Check out the OCCOG site using this link: https://apps.occeweb.com/RBDMSWeb_OK/
When the web page opens, choose “GIS Data Mining” and you’ll be taken to their web map where you can search for operators, wells, and other information by filling in the search criteria on the left side of the map.
In example below, I’ve entered the search criteria for a section in Kingfisher County – Section 15, Township 18 N, Range 5 W. Enter your own location and see the results.
Now, click on one of the records and the corresponding well on the map will be marked with a large red point on the map and the information about the well will be displayed below the map.
By clicking on the well records in the list below the search criteria and using the tabs below it, you can quickly find out:
- Operators in your area – You want to look for those who have an established presence nearby.
- Well locations – Are there wells in your area? How many? How close to your asset?
- Well statuses and monthly production values, which can also be exported to Excel for further analysis. Look for actively producing wells in your area. Wells with marginal production should be further explored as they could predict lower royalties for you.
Of course, there’s lots of other data to be used in your due diligence research, much of it can be easily mapped. As always, I’m here to help. [email protected].
Good news! As an early Christmas gift to OklahomaMinerals.com subscribers, in early 2017 we’ll be taking some of the work out of conducting due diligence by providing key due diligence maps and data right from our site. More details soon!
Julie Parker has a decade of experience serving the Energy industry where she became an expert in the integration and application of geospatial technologies to exploration and production projects and workflows. Ms. Parker entered the industry in 2006 when she became the first GIS Director for Chesapeake Energy, a large independent producer of natural gas headquartered in Oklahoma City, Oklahoma with operations throughout the U.S. During her tenure at Chesapeake, Ms. Parker built and lead a robust, cross-functional GIS department that gained a reputation for developing and deploying leading edge solutions for nearly all areas of the company.