My family and I have been contacted by a landman representing Arkoma regarding our land in Desoto Parish. They are offering $750 per acre, three year lease and 18.75%royalty. Not nearly what we received several years ago from Petrohawk but times have changed. Is this the going rate now? Anyone had any dealings with Arkoma?

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104 acres in township 11 North
Do you have a current going rate for the area?

I leased acres in DeSoto Parish last year, and got a 25%  cost-free royalty.  I like Jay's recommendation about making sure you have a good oil & gas attorney.  For 104 acres, this is a must.  You said you are in Township 11N.  What range?

We are in Range 14 west. I agree that the royalty percentage seems low and we should push for better cost free. We should receive our offer paperwork later this week so we can examine further.
I failed to mention the company contacting us on behalf of Arkoma is Blue Ribbon Energy. I have read some negative things posted on this forum and I am concerned about who we are dealing with

Blue Ribbon Energy has not recorded any leases in DeSoto Parish as of yesterday.  I know a little about Arkoma and don't have any concerns regarding those past business dealings.  The current state of exploration for oil and gas is depressed and may remain so for some time.  The question of whether mineral owners should consider offers below what had become the norm previously is worth consideration.  I posted a discussion in the TMS group asking whether those mineral owners would consider lower offers if it would facilitate development and some thought it was a reasonable alternative.  Of course the question is, how much less?  Henry makes a good point.  Experienced and active O&G attorneys are likely to have broader knowledge of current offers for comparison with Blue Ribbon.

http://www.arkomacompanies.com/

Thanks Skip. We should have our paperwork by end if the week and will review very closely. Will likely counter offer for better royalty % if everything else seems OK.
You helped me several months ago with contacts for release of lien from Petrohawk which we obtained and I really appreciated your knowledge and help on that matter.

You're welcome, Stephanie.  I'll look forward to the details of your offer once you have it in writing.

Do not lease with Blue Ribbon nor Arkoma. They are looking to sell the leasehold interest and keep an ORRI in your section.
Arkoma is not an operator.

Speculator is all they are. Sign with reputable operator and do not sign for less than 1/4th royalty.

Mr. Land, who do you think they would sell to? If there are interested buyers then why are they not on the ground buying leases? Many times in the past I have seen speculators get their butt's burned and the only one that comes out are the mineral owners. Your advice to the folks may have held true a few years ago but in today's market you seem to be giving only what you feel is the right thing to do. How do you know that these companies are speculators? Right now everything is a crap shoot and even some oil and gas lawyers seem to not know the best way to advise their clients as far as bonus and royalty come into play. Higher royalty comes into play when a well is drilled. Higher bonus comes into play when a well is never drilled. It is my guess that you think that the Haynesville Shale will come back in it's smoking glory but  it is my opinion that you to are speculating.

Two Dogs,

  Great point.  There are so many variables that people don't necessarily take into account when they are offering their advice.  $78,000 is a lot of money.  She could hold out and get nothing now and get an offer 8 years from now.  The last time I leased a well was not drilled and I got the bonus money and will hopefully get to lease again in the future.  

  What is good advice in general is not always good advice for someone else.  

  I have a friend who didn't lease and sold the property and reserved mineral rights believing that he would get a better offer.  That better offer never came through.

  Most of us who have been on the site for a long time, know that when we get advice from Skip, Jay or Thomas, we are getting well considered, professional advice.

  No offence intended Mr. Land.  

  

Pirate

I know that Arkoma/Blue Ribbon is NOT an operator. Go search for any permitted wells under either's name. You will not find any.

They are attempting to put together a large leasehold and sell that interest in an attempt to make a profit off of the bonuses promised to landowners or carve out an ORR. This is how this goes.

Who would they sell it to you ask? Maybe Exco, who is directing all assets back to the Haynesville. No telling. Once they have a large enough leasehold, they can go "shop" among BIG operators and will most likely find a buyer.

Not to mention, is Blue Ribbon or Arkoma paying with a Cert. Check? If not, and they offer a bank draft, that tells me they do not have the CF to satisfy promised bonuses until they are able to sell the leasehold. If not, then why wouldn't they pay the bonus up-front. I have heard of people with bonuses paid through bank draft and after 6 months did not come through and the lease was voided. I bring up this point because I have heard this is the case with Blue Ribbon/Arkoma, as of recent.

As for the royalty, why would you lease for anything less than a 1/4 in an area that is PROVEN.  Who cares about prices right now. Operators can put in a well now and limit production until prices go back up, thus the landowner is stuck with an uncharacteristic royalty once prices rebound and everything is not a "crap shoot" as you put it.

No speculation here. Just facts my friend.

Over 99.9% of the leases I have bought were with a bank draft. With the Exco stock hovering around a dollar, I doubt they are able to buy much of anything,

There are more landmen out of work probably than anytime in the history of the oil biz.

For some reason these folks are not under lease. What do you speculate is the reason for them being unleased?

Just because these companies don't operate or drill wells doesn't mean they are not working for someone that does.

Honeycutt Hill and Audubon didn't drill or operate wells but were working for Chesapeake and Shell/Encana. If you google Blue Ribbon Energy you will find them to be a broker just like Honeycutt Hill and Audubon. Many times I have bought leases in another name than the company I was working for. Maybe they are working Mcmoran or someone that is going down to that oil that is rumored to be under the Haynesville or maybe they are going to drill something above the Haynesville. If there is quality Haynesville rock under these folks then why are they not leased?

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