Replies to This Discussion

Permalink Reply by The_Baron on December 22, 2008 at 5:46

I don't know where you are, but if you are in the shale area I agree with Jim.

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Permalink Reply by linda on December 22, 2008 at 5:46

Jim, What do you think a fair price would be?

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Permalink Reply by P.G. on December 22, 2008 at 5:47

What do you think is a fair offer?

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Permalink Reply by The_Baron on December 22, 2008 at 6:14

Depends on where the tract is. It's hard to speculate without more info.

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Permalink Reply by The_Baron on December 22, 2008 at 6:17

Although, being that CHK is involved, with a large tract, I wouldn't take anything less than 8k an acre at this time. That being said, I still believe it is more important to get a lease that protects your needs than concentrate on a big bonus.

You need to ask yourself many questions about how you want your land used. This is your chance to get the terms you want.

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Permalink Reply by Dion Warr, CPL on December 22, 2008 at 9:48

linda:

Please share (if you can) when the leases from some of the other mineral owners in this unit are due to expire.

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Permalink Reply by RAY on December 22, 2008 at 11:53

my personal take on Lease Bonuses::

2007.........$100 - $300 / acre leases..................way too low

2008.........$20,000 & up / acre leases...............evidently too high

2009.........$2500 - $10,000 / acre leases ........seems about right
Share

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Permalink Reply by linda on December 22, 2008 at 12:21

Dion, One lease on 200 acres expired in June and as far as I know has not been renewed. CHK did offer stock to the landowner. I only know of one other large acreage and it expires in November. Right now that area is on a rig list pending leasing. There are 5 other land owners, 2 with 1 acre and
I dont know how much the other one has but I would guess maybe 10 acres, and 2 with 50 acres.

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Permalink Reply by Dion Warr, CPL on December 22, 2008 at 14:35

Based upon the above, I would advise you to lease for one (1) year, (not extend your current lease) based upon your fulfillment and address of your surface concerns as Baron states above (non-negotiable), your bonus concerns (negotiable upon a sliding scale, based upon an inverse relationship of bonus vs. royalty, AND a drilling commitment within the primary term with damage provisions for non-performance. Restrict the force majeure clause to only events involving natural catastrophe. Tell the landman you want to support their efforts, but refuse to be strung along for another extended lease term.

I would be happy to advise you further at your request, but frankly, there is plenty of good information and contributors on this site. There is even Skip Peel, Personal Landman and Site Sponsor, who has an ad right here on this site. Oh, Skip... Skip...?

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Permalink Reply by ELLIS HUGH on December 22, 2008 at 15:33

lol, I am sure Skip appreciates the plug.

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Permalink Reply by Randy on December 22, 2008 at 15:40

Man I'd take my chances and wait for everything to turn around, even it it took 18-24 months...or more.

Randy

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Permalink Reply by Grice on December 22, 2008 at 16:34

Linda, after checking your mother's property, it appears that every section surrounding your section has been already been unitized (translation: active area). I also did a search of other property owners within your section. There are four others who have a notable amount (more than 40 acres) of acreage. The remaining (12) owners hold less than 10 acres each.

Being as it has been suggested that the majority acreage owners have more bargaining power, I decided to see who holds the best position. Here is a breakdown of the five majority (more than 40 acres) property owner's acreage count (including your mother's);

2x40 acres
1x91acres (yours)
1x176 acres
1x204 acres.

I am in no position to tell you what is fair, or what offer you should be willing to entertain, but I hope this little bit of information helps you make an informed decision.

PS. I also have the name/address of those other 4 property owners, should you elect to contact them for collaboration.

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