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Rodinia Oil Corp. V.ROZ



TSXV:ROZ - Post by User

Comment by hookskipon Apr 07, 2014 5:08pm
248 Views
Post# 22422073

RE:Shane wood be excellant to have on board

RE:Shane wood be excellant to have on boardOne of the first things to find out is how much time is left on the leases before they expire. For some background, my family owns the gas rights on some lands in central PA in USA. We leased the gas rights to an exploration company about two years ago. The standard way these companies lease is to lease the ground for an initial five year term with an option (gas company's option) to extend the lease an additional five years. If, during the first five year term, they drill a producing well, the lease automatically extends for as long as the well is producing and no lease payment has to be made to us. Of course, we would then be getting royalty payments. If they do not drill a producing well in the first five year term, but they want to continue their lease, then they have to pay the lessees the same lease payment they made for the first five year term. This way of leasing is very standard and I would bet is probably about the same in Australia. Assuming I'm pretty much correct as to what the lease terms may be, then we may be faced with having to re-new the lease(s) just to hang on to them and have something of potential value. We know that Rodinia did not drill wells that are producing any oil, so somewhere along the line the leases are going to have to be renewed with a payment(s) equal to that made for the first lease term. In summary, I think we need to know the following: 1) When the leases expire 2) What the lease renewal cost would be 3) And most importantly, is there any geologic data available that sheds light on whether commercially viable oil reserves even exist? I'm not trying to rain on anyone's parade. Believe me, I'd like something to come out of this that could produce a nice ROI. But I do think the three items I outlined above are where we need to start.
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