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Comment by Herman (Chuck) Plonnigs, III on April 29, 2012 at 10:09

Mr. Peel, you make some very valid and truthful observations. My family and I were approached by our first land/person February of 2011. I had a phone conversation with him but never met him. If memory serves that was Pinebelt.

 

My family did sign leases with him. My primary concern with the lease was the 4 year primary with the 3 year option. At some point after that I was contacted by phone by a gentleman from Lafayette(TS Dudley)…same terms. I again stated the terms of the lease just didn’t seem appropriate. With my awareness of the Over-Riding Royalty Interest term I can now see why a long-term lease could be useful for them.

 

I have since contacted my land man and left the message that I was not interested in being “forced pool” and that the next time he was around to call me. I’m thinking that was the end of last year…I haven’t heard form anyone since.

 

But my point is this…at no time did I get the impression/feeling that these gentlemen trying to “get me”. They were all very cordial and respectful and my communication with them was not confrontational by any means.

 

I may ever hear from anyone again but I didn’t want my little remark to be taken out of hand. I have nothing but respect and admiration for their business/career. I have known people in this business personally over the years and I had much respect for them and their knowledge.

 

Thanks

Comment by Skip Peel - Mineral Consultant on April 29, 2012 at 4:21

Chuck, IMO it is best to take a pragmatic view of the leasing of lands for exploration and production for what it is..... a business.  There are a number of rational business reasons why O&G companies do what they do.  The industry isn't going to change the way they do business because mineral owners wish it.  Mineral owners need to perform their own due diligence and take responsibility for their own decisions.  Land companies have no requirement to educate mineral owners and their landmen often don't know the specifics behind the offers they make.  Any mineral owner who accepts the first lease offer and does not attempt to seek professional counsel is likely to be disappointed when they learn more later.  In the age of the Internet and access to GHS it's relatively easy to find basic information and ask specific questions.

Comment by Herman (Chuck) Plonnigs, III on April 29, 2012 at 4:05

Thanks Skip for your very well articulated response. I did have a good idea of what it meant but, by all means, not all.

 

The more I read about this stuff the more it sounds like we’re dealing with the mentality behind running a successful used car dealership!

 

Thanks again

Comment by Skip Peel - Mineral Consultant on April 28, 2012 at 11:06

The $10 And Other Valuable Considerations is legal boilerplate of no real significance.  When a land company, other business entity or individual takes a lease from a land/mineral owner and assigns it to an energy company such as Devon it is customary that a portion of their compensation is an Over Riding Royalty Interest.  It is likely that Devon had an agreement with the lessee that it would assign a royalty interest for the differential between say a quarter (25%) and the royalty called for in the lease.  For example, If the lease is for one fifth (20%) the lessee received a monetary payment plus a 5% royalty interest in the lands covered by the lease.  This is quite common and difficult for the mineral owner to avoid unless they have a large and strategically located interest and/or they are willing to accept the risk of waiting until the operator is ready to actually begin development (forming units and drilling wells).

Comment by Marc Stepman on March 9, 2012 at 5:22

Any new information floating around on the Morehouse Parish activity in regards to leasing or well info? 

Comment by Volkswagon guy on October 11, 2011 at 3:09

Insider tip.  John Yaya who is a local source confirmed it.  Can't say anymore or I might regret it.

Comment by Buck Shot on October 9, 2011 at 4:17

Volkswagon guy, where did you get your information about BTE leasing near Mer Rouge?

Comment by Marc Stepman on September 29, 2011 at 2:51

Did BTE open up an office in the area?

Comment by Marc Stepman on September 26, 2011 at 11:18

You are correct.  It could use a break.  It is good they are looking at it hard.  I have land north of Bastrop.  I hope it comes my way soon.  With all the mills closed down Baytex, Devon, etc would have a large impact on the area.

Comment by Volkswagon guy on September 26, 2011 at 2:38

Yeah, Baytex is involved in the North Dakota shale oil boom.  They are apparently trying to branch out from domestic  (Canadian) heavy oil to include light. Morehouse Parish could really use a good break-nothing but bad news for the last few years.

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