Lease bonus/terms

Any ideas on deep rights lease bonus/terms for Harrison County.   Starting to get some offers and was wondering.  thanks, jh

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Permalink Reply by Kathy M. Stephens on September 10, 2016 at 2:26pm

Hi Jack, We have probably been contacted by the same broker out of Tyler.  I will tell you what they offered and share a little information we were given by another party. The offer was $150 per acre & 1/5 royalty. We did not sign yet. 

BP has drilled multiple recompletions in existing vertical wells recently. I am not going to repeat what we were told they are looking at because it is probably false, but it is not "deep oil". The person who shared this information with us is not an executive or affiliated with an operating company, but does work out in the oil field. Hopefully the person is correct and it is a NG field that is not part of the Haynesville Shale. Kathy

Permalink Reply by JHH on September 12, 2016 at 8:10am

Thanks Kathy.  we were offered zero bonus at first... now it's $250/acre....1/4 royalty.  we recently got $500/acre...1/4 royalty from another company.

Permalink Reply by Kathy M. Stephens on September 13, 2016 at 7:52pm

Jack, $500 p/a and 25% is much better than anything we have been offered in a couple of years.  We did ask the young man to let us know what royalty interest they could offer with our "free carry" clause because I believe we are both looking at less than an 1/8th royalty now with Sabine and Samson and the charges they are applying to both of us. Kathy

Permalink Reply by JHH on September 13, 2016 at 9:00pm

Thanks Kathy.  I'm not ashamed to ask... what is "free carry"?

Permalink Reply by Kathy M. Stephens on September 14, 2016 at 6:51am

Hi Jack,

It is a term included in our lease addendum that states that we will not be charged any costs, such as transportation, compression, etc.  It is normally the first thing the landman tells us the company will not accept:). With companies like Sabine and Samson we would have been better off with a "free carry clause" and 1/8th royalty. Kathy

Permalink Reply by NANCY LENAU on September 27, 2016 at 7:47pm

Thank you Kathy for this information !  I have never heard of this Clause.

Permalink Reply by Kathy M. Stephens on September 28, 2016 at 7:04am

You are welcome Nancy.  The only time our "free carry" clause has been accepted were instances where the operator had to have our lease. Normally it is the first thing we are told the company cannot accept. Kathy

Permalink Reply by Keith Mauck (Site Publisher) on September 16, 2016 at 1:22pm

May want to post in here if you haven't yet - http://www.gohaynesvilleshale.com/group/harrisoncountytexas

Permalink Reply by Skip Peel - Independent Landman on September 27, 2016 at 9:08pm

Free carry is another name for a no cost royalty clause.  Beware - regardless of the name of the clause, not all versions will accomplish what the lessor expects.  There is a lot of devil in the details.  If you want to have one that will stand up in court, it should be drafted by an O&G attorney that litigates and understands case law for that particular state.   

Permalink Reply by Kathy M. Stephens on September 28, 2016 at 7:01am

Well said Skip.  Kathy

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