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Due Diligence from a Mineral Buyer’s Perspective

This month’s article is a continuation of the Due Diligence topic we started in December.  You may remember in my previous article we examined the value of maps and GIS data to Mineral Owners when they are conducting due diligence in response to an offer.  Now, I would like to discuss the due diligence process from the perspective of the Mineral Buyer.  As you might have already guessed, maps have a major role to play in this scenario too.

Time is usually of essence when making mineral buying decisions.  While thorough research of public and seller records is a primary component of the due diligence process, GIS data and maps can help reduce precious time by focusing document research and quickly spotting areas of potential concern. So, what kinds of “Where?” questions do mineral buyers pose?

  • Where are the oil & gas leases owned by the seller?
  • Where are the major operators in the area and where is their acreage unconsolidated?
  • Where are the mineral buyer’s areas of interest and what surrounds them?
  • Where are existing wells within the buyer’s area of interest?
  • Where are the producing areas and associated production rates within the buyer’s area of interest?
  • Where are there facilities on the property such as compressors, plants, water storage, etc?
  • Where is there evidence of environmental issues such as chemical spills, salt water contamination, etc.?
  • Where are there water bodies, wetlands, or flood zones on the property?

There are a number of free, public sites to help mineral buyers conduct their map-based due diligence and answer a large number of their “Where?” questions.

Oil and Gas Operators, Assets, and Production

Let’s begin with the site I introduced to you last month, the Oklahoma Corporation Commission’s interactive map which contains much of the information from their oil and gas databases.  If you haven’t done so already, 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.  For more information on navigating the site, refer to my December 2016 article on the Oklahoma Minerals site.

The OCCOG site is a great source for determining the location and surrounds of the buyer’s intended purchase area.  By using the tabs at the bottom left of the map and the check boxes to the right, buyers can determine surrounding operators, well production information, hydrology (water bodies) in the area, and if the potential acquisition site is on Federal land.

General Information Maps and Data

Another great source for mineral buyers to check out is the OKMaps site published by the Oklahoma Office of Geographic Information.  This site contains maps for political boundaries, transportation routes, elevation, and seismicity There are 2 ways to access the interactive maps: 1) guided access in which you select the type of information you would like to view and go to a pre-rendered map; 2) direct access to a map viewer containing all of the OKMaps GIS data.  Make the GIS data visible by navigating the right panel beside the map and clicking in the checkboxes in the list.

Regardless of how you enter and use the OKMaps site, you will find a lot of valuable information to speed along your research.

Using Imagery for Due Diligence Research

Few people realize the value locked inside imagery to help with due diligence research.  One of my favorite features of this site is the statewide imagery data that’s available.  There is recent aerial imagery as well as imagery from 2008-2015.  By examining these images buyers can easily discern existing and historical infrastructure, development areas, land cover, and environmental conditions.  In the example below, I’ve entered the OKMaps interactive map directly and have checked on the “Google Maps Aerial Layer” to see how my area of interest appears .  By clicking on the checkboxes below this, I can view my area back through time to see how the area might have changed since 2008.

If you want to look back even further, OKMaps also has a link to historical aerial photos  1930-1989.  The historical maps were scanned by the OCC and are searchable by Township and Range. One important note here, many of these images are viewed as standalone pictures and will not be viewable in the interactive map window.  Nonetheless, they could be helpful for spotting old abandonded wells and other infrastructure on a site.

Water Resources, Wetlands, Floodplains

The next interactive mapping site I would like to introduce you to is one published by the Oklahoma Water Resources Board-  http://www.owrb.ok.gov/maps/index.php .   This site is an invaluable resource for buyers researching water resources, wells, and areas subject to regulatory constraints.  You’ll find a generalized map viewer on the site as well as more than a dozen interactive map viewers covering all things related to water in our state including wetlands, floodplains, and water rights.  All of these viewers are available from the site’s main page.

Navigate the maps by using the “+” or “-“ signs in the top left corner to zoom in or out to your area of interest.  Click and hold your left mouse button down to reposition the map.

Ownership

No discussion of buyer’s due diligence would be complete without introducing you to the resources available in Oklahoma for ownership maps.  Each county tax assessor’s office in our state has the responsibility for maintaining land ownership records and, of course, taxation on those lands.  Today, most counties have digital land ownership data and maps that can be searched online.  For our purposes here, we’ll discuss our state’s sources of digital ownership maps.

You can access basic statewide land ownership parcel maps from the OKmaps site through the guided entry or the interactive map method. If you just want to look at ownership, the guided access is easiest.  http://okmaps.org/ogi/default.aspx

Once the map loads, click and hold your left mouse button down and move the map to the area of the county you’re interested in and release.  Next, use the vertical bar along the left side of the map to adjust the zoom-in level of the map higher to see more detail on the map.  The parcels will not show up until the bar is midway or higher.  Bear in mind, the more you move the bar towards the “+” the more detail you will see in each parcel. 

OKMaps ownership basic data is free to the public through this site.  If you need more detailed information on land parcels, I suggest you check your county assessor’s web page for additional sources of data.  There are numerous commercial sources of ownership data and maps for Oklahoma.  If you need a referral or more information, I’m here to help on this or any other mapping-related topic.  Email me at  [email protected]

In case you missed the news in my last article, we’re working to simplify the due diligence process by providing key maps and data right from the Oklahoma Minerals site in early 2017.  Stay tuned.

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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.

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