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Case Studies

Successful Oil and Gas Leasing and Development Program

With over 140,000 acres of freehold mineral title in western Canada, the client required an effective process to market their assets for oil and gas leasing and development. They needed active management of their leases to deal with a rapidly evolving industry and maximize value.

Project Highlights

  • Over 140,000 acres of freehold mineral title
  • Challenging management of leasing in an evolving industry
  • Processes created to actively manage full cycle leasing
  • Maximum value extracted from each freehold lease

Challenge

  • A client with over 140,000 acres of freehold mineral title in western Canada required an effective process to market their assets for oil and gas leasing and development
  • Though the client had successfully leased out certain properties, there was no active management of the assets to deal with a rapidly evolving industry.  The proliferation of horizontal drilling techniques, unitization, waterflooding and EOR required lease preparation practices to advance as well
  • Once properties were leased to E&P companies, there was no mechanism in place to manage lease compliance with respect to competitive drainage (offsets), production allocation on horizontal wells, royalty calculation and payment

Solution

  • The Niven Fischer team implemented an ongoing process to track industry activity near the title lands, which enabled us to efficiently market the lands for leasing and incorporate competitive lease terms
  • We created a “tool box” of varying lease formats, production allocation, operating, drilling commitment and other precedent land agreements in order to maximize the client’s earnings for each parcel of land
  • We developed procedures to effectively track lease compliance, which actively reviews potential offset obligations, potential defaults, and ensures royalties are paid correctly

Value

  • Niven Fischer continues to actively manage the client’s assets, and the processes implemented allow us to extract maximum value from each parcel of freehold land over the life of the leases
  • Since Niven Fischer began managing the assets, we’ve issued hundreds of mineral leases. Over 250 wells have been drilled on the leased lands, and we have been successful in recovering previously unpaid offset compensation and incorrectly paid royalties.
Randy Green, P.Geoph.
Senior Vice President, Asset Management

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