Replies to This Discussion

Permalink Reply by jeff on October 29, 2011 at 13:32

Joe, I hear you, as we have discussed I have shallow rights only(Wilcox) and even if I had the deep its not enough acreage for a Chalk unit. All I have is infrastructure and shut in well bores that could be used.. I do have an option on acreage under and around me to get close but I haven't been able to convince any of my investors to pony up. I am glad to hear that 1N 1W is active. That is right next door.

Permalink Reply by charles gaiennie on October 29, 2011 at 4:15

Am I being creedy or in 1N 1W, 2N 1W etc. Lecompte area don't we have potential for  Wilcox, Autin Chalk, Eagle Ford and Tuscaloosa Marine Shale????????????

Permalink Reply by Hydrocarbonite on October 29, 2011 at 7:17

hey charles hope to see lecompte leased i have interest just north west of ville platte around pine prairie area,, millers lake to b exact.... huge wilcox play all around us ,,, hoping someone will do siesmic work and explore central evangeline,,,,   tms, austin chalk, eagle ford, etc.... shawn

Permalink Reply by charles gaiennie on October 29, 2011 at 10:43

Hydro, I've been following the rainbow gold pot too long, in 1997 Chesapeak proposed drilling units

in the Masters Creek now West Cheneyville Field Austin Chalk  reaching into Evangeline only about 3 sections north of Pine Prairie, I don't think the  1920 ac units were ever drilled due to production problems of some of the earlier wells but it got to be spring and plowing time, all of Rapides was leased by then and not much happened.  I understand they recently completed another Wilcox in Eola, don't know for sure.

Permalink Reply by charles gaiennie on November 10, 2011 at 3:46

Leasing has slowed to a crawl, Rapides 1N 1W & 1E, A lot of small landowners have heard to much about Haynsville Shale and want more than $300 and 1/4, I hope they lease enough for well site and unit.  Charles

Permalink Reply by Abington on December 1, 2011 at 20:02

Heard there has been an offer of 10 bucks a acre this week for about 100 acres near Ruby to do sesmic tests.

Permalink Reply by Joe Aldridge on December 2, 2011 at 0:29

They should be paying 25-35 an acre. Plus any damages. 

Permalink Reply by Two Dogs, Pirate on December 2, 2011 at 5:24

I don't think that I would give them a hard time at Ruby. Just be thankful that someone is willing to take a look below the ground out there.

Permalink Reply by jeff on December 4, 2011 at 7:59

I agree with you Pirate. If it were my acreage and an entity came to me with an interest in my minerals I would want to be cordial and interested in making a deal, one that is quite possibly going be putting money in my hands at no cost to me. If you are worried about the land damages or any thing else as a surface/mineral owner it is easy to have your deal papered over to suit you.  But to be adversarial and greedy is such a deal killer. In my opinion, Modern Greed has become an ugly aspect of the oil biz. Unrealistic expectations from mineral owners has been spawned by the public companies. The ones that took mineral leasing to a point of insanity. 25k+ an acre. So many deals have been lost due to greed and short sightedness. As a matter of fact I sat down with some mineral owners yesterday that previously had agreed to a deal. When I came for a signed lease, I was greeted with WE WANT A THOUSAND AN ACRE AND A 1/4 !  That was not we we agreed on verbally, and that is not was stated on the lease I sent you two weeks ago. I said. Then it was the old, we have been screwed by Chesapeake back in the 90s and bla bla bla. There aint no way I said to myself,and mentioned to them that the same thing happened with one of their neighbors. They made a deal with us, they had a copy of the proposed lease(1/5) a few days later I sent the check and for the third time this particular party changed his mind and wanted double again plus a 35% royalty. I dont want to say what the bonus was but it was a record breaker for the area. He had a couple of viable wells that we wanted and were prepared to pay a premium, then it was the,  IF THEY WILL PAY A THOUSAND THEN THEY WILL PAY TWO. Pure greed and ignorance. Those two wells on his land that were viable were plugged in August of this year.

   I hope that the mineral owners I visited yesterday come to their senses. Do you want a whole lot of nothing, or fair share of something?  Or better yet participate in the WI and pony up. Take a little taste of what its like to be an operator.

Permalink Reply by Joe Aldridge on December 5, 2011 at 1:43

Jeff,

I can understand your frustration with leasing but this is $10/acre for a seismic permit as opposed to $25-35 that was paid 20 - 30 years ago.  I guess there is a depression in the oil and gas industry - Oh, that's right oil is only $100.00 a barrel. This seismic survey can also prove the acreage less than desirable for leasing. 

Also, I was screwed by Amoco back in the 90's. I was "BOLD FACED LIED TO" by their landman. All I have to go on is past experience and a lost opportunity to have an AC well drilled 15 years ago and possibility still in production today. A lot of industry people will tell land owner's anything to get the lease. That now comes back to haunt the same industry today.

If you can tell me a 100% way to protect me and my minerals in a lease negotiation I would be very interested in hearing it. 

Permalink Reply by jeff on December 5, 2011 at 4:48

Joe,

I have no doubt there has been a long history of deceit in this biz, as in most all businesses but I always have been fair and honest, too a fault, so when I unfairly get thrown into the category of a lying, tricky oil man, it bothers me. These particular folks complaint was with CHK back in the nineties. They were told they would they would have income off a well that was going to be drilled and so they leased their property. Never happened CHK pulled out before drilling a well.  They didn't lose anything they made their bonus but were mad because they were lied too? They were told a well was going to be drilled. So 20 years later I am supposed to pay for for the sins of previous operators. I told these folks what I was prepared to do a couple of weeks prior and got a verbal ok. Wrote up a lease and took it over, and was promptly blindsided, not by the actual owner of the minerals but his brother in law! We want a thousand and a 1/4! was the first thing out of his mouth. I am sure you can read my frustration and disappointment through the lines here and ya I am venting.  I hope they go talk to their neighbor. Maybe he will show them what a nice job of plugging we can do.

 As far as protecting yourself as a mineral owner.... paper it over. If you have concerns or particulars that aren't in the proposal,,simply write them in, get original signatures and put your copy in a safe place. As I have yet to learn. Never take a mans word for it! A handshake these days seem do do little other than spread germs.

  Joe, another tidbit about greed . I live in the Fort Worth area and have watched in awe as the lease bonuses were climbing to nearly 30k per acre. I have friends and acquaintances whom own houses and land there. They would ask me if I thought 27k per acre was a good price. Some leased some didn't, those who did were very lucky, then all of a sudden Oct.08 you couldn't get 150 an acre. The greed driven, decision not to lease at 27 but to try and hold out for even more, got them nothing.  Now their neighbors who did lease are getting a check.

Permalink Reply by Joe Aldridge on December 5, 2011 at 5:41

Jeff,

I appreciate your candor and your frustration. As far as CHK is concerned, I think a little history lesson and an explanation to the people you are working with may help. As I'm sure you know CHK almost went bankrupt at that time. The price of oil collapsed and that was probably the reason for that lease not being drilled. Their whole focus changed from exploration to acquisition. And that is how Mr. Mclendon saved the company. Those things can and do happen in this industry. I understand that and if you explain that then their position may change if they are reasonable. My problem is like you state there is no integrity with a lot of individuals in the industry and I don;t know how to deal with that. I guess that my position now is as long as I am not leased then I have a bargaining position. After I lease I have no guarantee of anything. A mineral lease is simply an option and that option is in the favor of the lessee. 

In my case I have a 10 3/4 inch cased hold to 3200 ft. that is plugged. I know where I am geologically. My property and that surface hole is on a lateral fault that branches off of a major regional fault less than 1/3 mile from my property. When Amoco came in and wanted to lease I was more than willing to lease for a very nominal bonus. I was told that they were interested drilling to Chalk. Right after the fourth rental payment was paid I had a company come in and want to re-enter the plugged hold and drill to Chalk. Since I was under lease that could not happen. Since then I have been told by someone that was working for Amoco at that time in this area  that Amoco had no intention of drilling Chalk. So I was lied to by Amoco's landman. In the end It seems to have come down to a game of "keep away" that Amoco was playing to keep other players out of the Port Hudson and surrounding area.

So I guess what it comes down to is: Do I do a 180 day "Drill-or-Drop lease with a $1,000,000 damage clause if the well is not drilled or do I go for a Large bonus this time and not be concerned whether the lease is drilled or not? 

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