posted on Jul, 17 2008 @ 10:58 AM
Title: How Oil Leases work...
1: You start the bidding process! ( 18,000 acres on one plot cost Getty oil 6.5 mil, this permit only allowed them to..... moveon to No. 2
2: The Company then files for a permit to locate a 'POSSIBLE' place to spud in!
3: You then must APPLY for a permit to setup your rig..usualy takes 3-5 years for the permit process in this instance.
4: The government usualy denies this permit the first time. Plus you must fight any and all lawsuits that might arise because you have 'PURCHASED'
5: you then appeal the denial. this takes another 2-5 years. You've nowspent almost 40 million dollars and you still don't have your rig set up or
any real idea theres realy oil in your lease.
6: you then gain your permit to setup and spud in.
7: EUREKA...You've drilled for 12-18 days and gone down 30000 ft and actualy found either natural gas or oil. Drilling costs amount to 2.6 mil.
You all set to pump out what you have found.....guesswhat????? YOU NOW NED A PERMIT TO ACTUALY PUMP OUT WHAT YOU'VE PAYED TO DRILL FOR AND THE
PERMIT PROCESS STARTS AGAIN.
8:You have to aply for this permit because you can't pump anything untill the Government ( EPA, DEP, Animal rights folks, Sierra Club and any other
tree hugers now fight you for the permit) grants you the right and permit to pump it.
9: Government denies your permit to pump because they just feel like it. The pressure from the anti's and its election time.
10: Apeal time...2-5 years in apeal and another 20 mil in costs!!
11: Hallelujah, you now have your permits to pump your product!!!!!! You've spent 60 -70 mil. on the process and your market is being played with by
the government. It costs 68.00 per barrel to get it to market. but actual cost is much more.
YOUR NOW IN THE OIL BUSINESS, YOUR A BASTION OF THE WORLD AND EVERYBODY HATES YOU!!!!