Replies to This Discussion

Permalink Reply by Craig Cooper on September 30, 2010 at 8:34

Anne,

There is a tremendous amount of good information on this site, so please have a look around. There is also a Clairborne Parish Group at: http://www.gohaynesvilleshale.com/group/claiborne_parish which would be good to join and tap into.

Obviously, it is a good idea to make sure that the terms offered are at least as good as those already offered to others in your area so don't be bashful about participating in the group and asking a lot of questions.

Good luck!

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Permalink Reply by Anne C on September 30, 2010 at 17:38

Auglaize~ Thank you for suggesting the Clairborne Parish Group!

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Permalink Reply by Aubrey C. Sanders, Jr. on September 30, 2010 at 10:27

Anne,

Welcome to the group. Auglaize has offered you some excellent advice and we have lots of members whom I am confident can answer all your questions. I own land about 20 miles west of yours. As you will see there is a great deal of excitement along the "Stateline trend." I am confident that the future will be good for landowners in that area for a long time. So, take your time before you sign any lease. In my opinion an oil and gas lease is probably one of the most important contracts you will ever sign, especially when you consider it could be in effect for a hundred or more years. I know of leases in Haynesville field which were signed in 1919 and are still valid.

Best of luck to you.

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Permalink Reply by Anne C on September 30, 2010 at 15:17

Aubrey~ Thank you so much for a prompt response :) Yes, I definately understand what you are saying. We have another lease that was passed onto us from great-grandfather. It is the following tract: Sect 5 T23 R5W.
The lease was signed in 1941.....it is still pumping a ton of oil, unfortunately the royalities are less than
$1400.00 per year and it has been pumping (on average) a gross volume of 469 barrels per month!!!(for as long as I can remember) I don't want to make a mistake with the lease I was offered for a different tract Sect 32 T23N R5W. In your opinion, is $6000.00 up front, plus $300 bonus per acre and 1/5 royalty a good deal?

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Permalink Reply by Aubrey C. Sanders, Jr. on October 1, 2010 at 5:43

Anne C,,

I just read your responses from Jack Blake and the BirdDawg. Lots of good advice in both. Perhaps they are more knowlegeable than I re: that specific area. However, their advice is, in my opinion very sound. Personally I always believe landowner should hold out for 1/4 royalty. I do not lease my land as I always participate with working interest as I only own small acreage and I am also an owner operator.

I think it is imperitave that you become as informed as possible before signing a lease. I don't quite understand what you mean by $6,000 up front. Is that the bonus, perhaps for 20 acres, or ???. How many acres do you Have?
Anyway, my opinion is that you should be able to do better than the offer you have.

Best of Luck to you!

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Permalink Reply by Jack Blake on September 30, 2010 at 15:05

It is worth atleast three thousand per acre and maybe more. 1/4 no cost royalty is standard.
Three year primary with no option is standard.
Having said that nothing is standard.
It's worth at least ten times any initial offer cried Jack Blake!!!!!!!!!!!!!!!!!!!!!!!!!!
read, read, read on Go Haynesville Shale and keep in minsd some of the folks on here use several different ID's to steer people. Regularly visit GHS daily for 6 months before you sign anything. Right now gas is CHEAP(less than $4/mcf). So if they offer yopu $300.00 now they'll offer alot more later. In the leasing frenzy two summers ago when gas was $12/mcf some folks were getting $10,000.00 to $12,500.00/acre and more and $5000.00/acre was the norm.
When Jack Blake first started getting those letters offering $100.00, $300.00, $500.00/acre he did not act. When they got to $4500.00/acre Jack signed. zThey went from $500.00 to $4500.00 Three months later Jack's neighbor got $12,500.00 per acre with 25% cost free royalty.
25% cost free royalty is standard. Settle for nothing less than that. In fact you should not even have to negotiate that. What you have to negotiate is the lease signing bonus pewr acre. You're in the money howled Jack Blake!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!WAAAAAHHHHHOOOOOOO!!!!!!!!!!!!!!!!!

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Permalink Reply by Anne C on September 30, 2010 at 15:54

Jack~ Thank you so much for your quick response. What you had to say was so interesting! I want to be sure to make the best decision. ( see my response to Aubrey S.) The signing bonus, I now understand, is what I need to negotiate. If the standard is 1/4, then they will probably give it to me without any hassle.
Three year primary with no option sounds like a way better deal!

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Permalink Reply by BirdDawg, plain ole' idiot on September 30, 2010 at 16:00

Jack, Jack, my friend,
There is no way anyone in this area is going to get $3,000/acre. No way, no time, it just ain't gonna happen. Go for 1/4 royalty and a vertical pugh clause. And any other surface restrictions you may want.

And any resonable lease bonus you wish. But you have to keep it within reason, based on the area you are in.

Just my opinion.

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Permalink Reply by Anne C on September 30, 2010 at 16:18

Hi BirdDawg~ Thanks for your opinion...your info was also very informative! What do you think is the most I can get per acre for that area?

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Permalink Reply by Shalester on October 1, 2010 at 5:36

I have to agree with Bird Dog, I have never heard of prices that high for Claireborne Parish.

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Permalink Reply by Henry on October 1, 2010 at 5:51

Anne,
Why don't you go back to Pinebelt, and ask them what formation they intend to drill? I cannot imagine it is Haynesville. If the landman cannot tell you the formation, ask what depth they intend to go to. That is the first question I would get answered. Before you rush and sign, let's see what the intent is here. Ask what formation will be drilled. Ask what company will be doing the drilling. Let's get the answers to those two questions, and then we will have better info with which to try to help you.

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Permalink Reply by Aubrey C. Sanders, Jr. on October 1, 2010 at 6:16

Probably Smackover or less likely Haynesville sand. But, I expect basal Smackover or "Brown Dense". Good idea to ask so you can structure your Pugh Clauses accordingly!

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