Establish that the seller really wants to sell.

Most properties are sold because the seller gets more money than their worth. Keep in mind the definition of “Fair Market Value”.*

Establishing a “niche” can beneficial but it’s also important to be flexible.

Rules of thumb should be used only for initial screening and sizing. Discard them when getting down to the business of bidding.

Attempt to buy properties that have some upside potential and minimize the upfront cost for any upside.

If the economics of a purchase are good only if product prices escalate, DON’T BUY!

Never forget the power of a field trip.

Value spread can be important and the risks should be understood. (Too much value in too few leases can cause acquisitions to fail if key properties develop reservoir or mechanical problems.)

Look at ALL of the data.

Be absolutely sure that fish, fowl, animals and humans can co-exist with your producing wells, so evaluate the environment liability BEFORE closing.

*“The price at which a property would be sold by a willing seller to a willing buyer, neither being under compulsion to buy or sell, and both being competent and having reasonable knowledge of the facts.”

The SA decided, on the fly, to sell some of its acreage in one area of the play for a cash profit and overriding royalty and proceed with plans to drill in what was considered to be a less risky area.

As the SA prepared to drill, a large independent company also working the play made an offer for the remainder of the SA’S acreage for cash and ORRI which took the SA completely out of the risk of drilling.

We went from one extreme to the other as the play progressed and illustrated the absolute necessity that the SA remain flexible.

(Prologue:  The play fizzled, and we were very fortunate to have taken the exit opportunity.)

Our current team of two (2) geological consultants,, one (1) landman, two (2) petroleum engineers and a field operations manager would like to discuss how we might pool our talents in a mutually beneficial Strategic Alliance.

After all, we certainly don’t want to become like old members of a Zebra herd!

(For more on what this means, ask one of our team for an explanation.)