Lease offer 11n-r10w-section-20 Natchitoches Parish

I received a lease offer from Southwestern Energy last week for my minerals in Natchitoches. 3 year, 1k acre, 1/5th royalty.

Glad to see some interest again as it has been awhile. Anyone else get any calls recently?

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Way too low! They were higher when NG was under $2.50.

I understand opinions of current lease terms based on lease terms in the past.  I see the occasional quarter royalty on a new lease but it is always for "key acreage".  The mineral tract is large enough to materially prohibit an operator from reaching benchmarks of profit for a drilling and production unit or it has some other value possibly as a surface location or for a water pipeline as just two examples.  Regardless of the fluctuating price of natural gas and the current much improved price, the driver of lease terms is competition.  Competition drove the early Haynesville land rush and caused the extreme run up in bonus payments and offering a quarter royalty to everyone whether they owned 5 acres or 100.  That competition doesn't exist today and O&G companies take advantage of that.  If no one is bidding against you, you are the only game in town and have little incentive to sweeten terms unless the acreage is key.  Frustrating for sure but the new reality.

It would be highly likely that SWN is also offering leases in Section 17 to the immediate north and Section 29 to the immediate south.  Neither have been drilled and that would set up nicely for long lateral well groups.  Those considering a lease should let the lessee know in negotiations that they are aware that these sections have economic Bossier in addition to the Haynesville.

We had received royalties under a previous lease with Samson, then Petrohawk for the well SN 243538. It produced for a couple years but they had problems or gas price too low and it has since been P/A. I assume the gas is there but maybe extraction is the biggest drawback. Hopefully with the prices up and improved technology, drilling will be feasible again.

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