Replies to This Discussion

Permalink Reply by nisie, not a happy camper landowner on June 13, 2008 at 4:16

At Shreveport meeting last night lady who handles state land said average bonus paid to them in Caddo Parish was $13,400.

Permalink Reply by Kassi on June 13, 2008 at 4:33

Yes, she did. She also mentioned the ones in the Haynesville shale area were higher than the state average and some where as high as $17,000.00 per acre or more even for smaller 19 acre tracts. The thing is folks we need to slow down, get educated, organize and collectively bargain. This is just 3 months in to the Haynesville shale play.

Permalink Reply by Keith Mauck (Site Publisher) on June 16, 2008 at 5:23

Sabine....rumors are 10,000 -12,000

Permalink Reply by Coonman on June 16, 2008 at 15:53

bb

Permalink Reply by RJ on June 17, 2008 at 4:03

Any idea what the 25% would make an owner of 1 acre of good shale. I understand this would be a guess. But right now I dont have a clue what an acre will draw once drilling begines.Anyone like to take a stab at it?

Permalink Reply by SBossierGuy on June 17, 2008 at 5:04

DeSoto Dude,

If someone only had one acre and they knew a well was going to be drilled in their unit, wouldn't they be better served to be force pooled?

Using your example a 5mmcfd well would produce 1,825,000 mcf / year, but the owner wouldn't have to multiply that by .25.

So his monthly royalty would be 1,825,000 mcf / year x $9 x 1/640 = $25664.06 / year or $2138.67 a month.

The owner would face a risk penalty, though. The risk penalty is their share of the production costs X 2. Since these wells cost $6-$7 million (lets say $6.4 million to make the math easy), an acre would be $10000 X 2. So the risk penalty would be around $20000. That means the gas company is not going to pay you the first $20000.

It seems to me like a small land owner would stand to do better if in a force pool situation as long as they are confident there will be a well on their unit. Of course nothing is for sure and there would be no up front lease money, so be careful before trying this, I suppose.

Permalink Reply by Mit on June 17, 2008 at 7:37

I believe the plan is for 65 acre spacing, at least in S. Caddo, S. Bossier, Desoto, and Red River. This means more money whether you lease or forced pooled, but it can also mean no money is paid out until $60 million+ is produced in the unit if you are force pooled. You can get opinions pro and con regarding being force pooled, but try to find someone who has been force pooled. It is a huge pain trying to keep up with everything. Of course, the difference in money could make it worth it

Permalink Reply by BillBigD on June 17, 2008 at 6:59

Desoto,
When are the airport leases coming up? Thanks for all your info it is really helpful.

Permalink Reply by Keith Mauck (Site Publisher) on June 25, 2008 at 4:28

Any word from the airport leases?

Permalink Reply by TL DS1 on June 17, 2008 at 7:23

You are generally correct. I have 5 acres and am considering this. I've heard yes and no from knowledgeable people about the 2X penalty. However, they will certainly deduct expenses which I've heard is anywhere from 25% to 40%. I figure even if they take 50% my check would be double that of a lease. If you send a certified letter requesting it, the operating company has to send you quarterly reports on production and expenses for the life of the well.

Having said all that there is another bugaboo. If they start a new well before the first is completed the clock starts over and you will have to wait till both are paid. And if they start a 3rd before the second completes...
So you could wait years for a check.

I've studied this a lot and am still not 100% sure of these facts. I'm not sure ANY one person knows it all. If anyone else has input I would appreciate it.
Luck to all,
TL

Permalink Reply by DrWAVeSport Cd1 on June 17, 2008 at 8:27

If you get the "gross" %, you will be so much further down the money trail then anyone who gets a "net" deal!!!!

Anyone, any company can nickel and dime you to death on the "net." That is how investors get taken down the road to nothing. The O&Gs want to lease you so they can "essentially" be done with you...except for renewal time on their leasing agreement, or that often "illusive" "net" royalty check. Read on:

"At the wellhead level...gathering/transportation margin has changed from a fixed fee basis to a percentage basis...in most states the charge is 20% or more of an index price for the gas...At $5.00 gas, this means that the charge is $1.00 per Mcf. And at $6.00 gas, it would be $1.20 (and so on and so forth) - WITHOUT ANY CHANGE IN THE COST OF THE GATHERING OR PIPELINE TRANSPORTATION. And to compound the problem, additional charges (DEDUCTIONS) are made for: compression; treating; blending; metering; and line loss - charges that can easily increase the 20% up to 30% or more...Some producers are being charged 40% or more of the 'index value' of the gas, merely for the privilege of getting the gas to market....THE GREATER THESE CHARGES, THE GREATER THE REDUCTION IN THE PRICE AT THE WELLHEAD..." Quoted from the article entitled, "WHERE DOES THE MONEY GO?" written by Mr. John R. Hays, Jr. (2004 NARO-Tex Convention; The Woodlands, TX June 24-26, 2004)

Your acreage, Your royalty percentage, and how much of your "acreage" is included in the drilling section, how many wells are producing, etc., etc., etc...All keep dwindling down that royalty check...Unless you are one of the lucky few with large tracts of land/mineral leased land being drilled...

DrWAVeSport 6/17/08 p.m.

Permalink Reply by nisie, not a happy camper landowner on June 17, 2008 at 6:30

Does anyone know of any other bonuses signed in South Caddo with Chesapeake? I have heard something about $15,000?

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