Oil and Gas Leases, Rights

Member of the Better Business Bureau

About Our Program

Thank you for your inquiry. Our unique service allows our clients to take advantage of relatively little known programs operated by the Federal and Western State governments which allow individuals to compete for and possess oil and gas production rights on public land on the same basis as multinational corporations. We offer a “turnkey” strategy to help you claim your share of these rights. We research oil and gas lease parcels offered in periodic State and Federal auctions in Wyoming and Colorado, go to bat for you as your proxy on the auction floor, and assist you every step of the way from issuance of your lease by the government authority to getting it sold and assigned to an operator for development.

Here are the optimum possible royalty income returns from development of your lease, assuming the lease is eventually fully “drilled out” on 40-acre spacing, assuming the following parameters: $70/bbl oil, 50bbl/day/well, 4% overriding royalty interest, and a 50% dry hole risk factor.

And below is a lower-expectation projection, assuming the lease is eventually only half “drilled out” and wells average 20 bbl/day.

We have assumed an 11-month production year to account for well maintenance and “down time”, and deducted $10/day from the royalty for minor taxes. Gas may be produced along with or instead of oil, but we have omitted that for the sake of simplicity. All production is, of course, subject to a decline curve with time. For greater or lesser daily production, simply multiply by the appropriate factor. It is obvious that the larger a lease you acquire, the greater your chance of having producing well(s). This royalty income is in addition to the cash bonus you will receive upon assigning your lease to an oil company.

The R. C. Michael Company combines many years of academic, industry and government experience in the Rocky Mountain oil patch at your service. Currently, approximately 2 out of every 3 client leases which have been drilled have yielded royalty income. Our service is a 3-step process:

1. We bid for and purchase leases on your behalf at government auctions.
2. Acting as lease administrator solely in your interest, we negotiate the sale of your lease to an oil & gas operator, furnishing you with all proceeds from the sale (the "bonus").
3. The final step is the drilling of the lease, hopefully resulting in production yielding you long-term royalty income.

In March of this year, we negotiated two Federal lease sales in the Denver Basin of northeast Colorado, both for $150/ acre, on our clients' behalf to two Denver independents – one lease to Infinity Oil & Gas and one to Exterra Petroleum. This is the highest per-acre bonus we have yet secured for our clients. We expect the price per acre, and the assignment bonus paid for, good leases to only increase because of several factors, including:

1. slow but sustained global and domestic economic recovery;
2. continuing improvements in drilling and completion technology, making potential pay zones out of formerly overlooked formations (witness the huge Bakken play in the Williston Basin of North Dakota and the Marcellus Shale tight gas play in the Appalachians);
3. the chronic political instability of many of the world's oil-producing countries and regions – not only the Middle East but also, for example, Nigeria, Venezuela, and even Mexico;
4. Notably diminished offerings of new Federal onshore leases for sale by the current Administration and its “green' bias – the old inexorable law of supply and demand.

Please examine, complete, and sign the top sheet of the enclosed Lease Purchase Agreement which spells out our mutual responsibilities to each other in this endeavor. When you return it along with your check, you will be taking your first step in claiming your share of America's energy future and joining our roster of clients currently receiving production royalties. I look forward to going to work for you.

Sincerely,
Robert C Michael