Replies to This Discussion

Permalink Reply by Snake Stewart on January 8, 2009 at 14:31

Hey P.G.,
My luck is worse then yours because I would have to repay the Government the bonus money that I got , "that should have been theirs in the first place, after confiscating my minerals". With compound interest of course.

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Permalink Reply by linda on January 8, 2009 at 15:15

Snake, I believe you are right! After looking at some of the offers on here today they are messing with me. Why do you say they need me more than I need them? If I dont come to some sort of agreement with them, cant they force pool my acres if they drill in that section?

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Permalink Reply by Snake Stewart on January 9, 2009 at 14:17

Ms. Linda,

As KB explained, the more that you understand about this biz and this play, the more comfortable you can become concerning your interests. The insiders can give splendid reasons why we should feel indebted to the O&G's. Because I have yet to make a single solitary penny from the O&G's ,( I only spend money on O&G !) it allows me to view this whole thing from a different perspective. Not a better perspective mind you, just a different one.

If everyone in a section took the approach of not leasing, then the area would just have to be walked around or ignored until a much later time. That would be counter productive to your bank account. BUT !!!!! If you are one of the last in your section to sign and you own 15% of the section, the chances of them walking around you begin to slim due to the fact that they have already invested a large sum of money leasing your neighbors. They dont want your neighbors coming back up to lease again because the cat is out of the bag and it will cost them millions to re-lease that section.
This certainly puts you in the drivers seat ,so to speak, from a negotiations standpoint. That $1750 looks real small when you are in a position of leverage. You my dear are in a position of leverage. Not too much to make them walk away , yet enough to get their attention. Thats what it's all about. This is their game after all. All we can do is play the cards we are dealt, in the manner that best suits our interests.

When its all said and done, its about the bottom line. The O&G's have to do this for a living. They have no other means of surviving without leasing and drilling.Famous Amos & the Girl Scouts have the cookie selling business sewn up. They are not looking for business partners. If they drill ,with you unleased , it could cost them an additional 50% -60% in proceeds that would go to you as a working interest or whatever they call it. They want all of it and arent willing to share anything that they dont have to. Just in the same manner that I want all of mine. If they arent greedy then neither am I.

It is about finding middle ground I guess. Ground that your neighbors dont have if they signed too early. Remember that when they start turning the screws on you. A good deal has been described as one in which both parties leave happy. I have to agree with that statement to a great extent. But a Great deal would be one in which they leave the lease signing rubbing their hind-ends more then I am having to rub mine! Its nothing personal usually, until its too late of course. They arent your friend. They are a parasite of sorts. Could be a rather good paying one , if we play our cards right, that is. :-)

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Permalink Reply by The_Baron on January 9, 2009 at 19:05

Snake..

IT is true that we want to have as much leased as possible. However, a small tract will be simply force pooled. Its not a true loss, unless its a dry hole. All expenses will be recouped, plus "supervision". It is better to lease, get the terms and protections you want.

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Permalink Reply by Snake Stewart on January 10, 2009 at 17:24

Hello Baron,
You would be O.K. F/Pooling 15% of a section ?

Recouped expenses, plus "supervision" cant be that attractive to you O&G's, even on a small scale, I wouldnt think, Baron. The loss, while not total , would still be a loss compared to the 75% that would be made from a leased individual if the well was drilled. If not drilled, the leased acreage that expires would be a total waste. What, do you just chalk that up to experience ? Not hardly.

I have said 25 times, at least, that I would rather be signed then F/Pooled. But if the alternative is to take a lease for $2,500 or else........ Forget that noise! If $13,500 an acre didnt toast my bread, then $1350 certainly isnt. Doesnt matter what the economy is doing. Actually all the more reason to hold on to what I got ! A well in my woods 20 years from now will be much more valuable to me at that time, then it would be right now. Unless we really arent seeing the global fields on the decline.

Leasing for beans right now, would put to shame all the efforts that have been made to educate the people on this site. All the people that have bled shale for the last 10 or so months trying to help others. All the ones that have already taken bad leases that would gladly swap places with people that still have a shot at getting that good lease. Shame on anyone willing to squander this opportunity that we have.You do not have the right to consider yourself one of the fortunate to be unleased. If anyone has a problem with what I just said then you should call your local charity and just donate it all to them because you havent done your homework and you dont deserve to benefit from the losses that our friends & neighbors incurred a year or 2 ago. Hope I havent offended too many but it has been quite some time since I last vented. I will take 2 aspirin and check back with everyone in the morning to make sure we are all good.

20 years from now, good Lord willing, I may be the Sultan of Doyline.Wife wont let me have no harem, but after all these years with her, I dont want no stinkin' harem ! (LOL)
Always a pleasure Baron. Have a good one.

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Permalink Reply by Coyote Ugly on February 18, 2009 at 13:26

Snake
I realize that everyone's situation is different probably, but if one can afford to wait (like you) your reasoning makes a heck of a lot of sense to me.

I cringe saying it, but I'm one of those who leased a couple of years ago for 125 and 1/6.

Wish I was in your position.

If I was, I'd feel about like you do about it.

Just wanted to let you know I appreciate where you are coming from.

Good luck.

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Permalink Reply by intrepid on January 8, 2009 at 9:29

If you let the lease expire you should immediately write a demand letter to the company and request that they record a release of lease and specify a time within which they should do so.

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Permalink Reply by Johnny on January 9, 2009 at 2:49

Someone was offered $1750 an acre recently and turned it down??? Now in the current environment??? If the other terms were good, they may not see this high of an offer for some time...

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Permalink Reply by d. blizard on January 12, 2009 at 16:16

I was offered 2500 last week. I don`t plan to settle for that when others were getting up to 22000. They can force pool me or let it stay in the ground. I lived for 64 years before all this started and never missed a meal.

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Permalink Reply by P.G. on January 9, 2009 at 3:48

I think before I'd consider releasing for a low bonus, I'd want to know when the drilling was scheduled to commence and the lease be terminated if they didn't follow through.
Just like the companies are doing though, it might be a good idea for mineral owners to wait on higher prices as well.
I'll bet NG will come back into favor if the middle east situation gets worse.

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Permalink Reply by The_Baron on January 9, 2009 at 8:22

Just ask to see if they will lease for a shorter term.

And P.G., winters not over yet, we could still have a cold harsh winter to cause a drawdown in storage, or even a strong Hurricane in the gulf next season to shut in a bunch of wells...

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Permalink Reply by jacknick1 on January 10, 2009 at 16:35

The dogwood offer keeps looking better everyday....lol

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