Replies to This Discussion

Permalink Reply by king john on September 12, 2009 at 9:04

call it what you will, when you turn down money to hold out for bigger money that may or may not come that is speculation. imho.
kj

Permalink Reply by adubu on September 13, 2009 at 6:12

KJ---did you decide to edite and post your note you deleted yet--asking in freindly way

Permalink Reply by king john on September 13, 2009 at 6:50

yea adubu, been busy i will get to it soon.
kj

Permalink Reply by Douglass Marc on September 14, 2009 at 11:17

Hey guys. I am a newbie and I have been following things on this site for a few months- learning! I only have a small acreage, and have tried to get a good lease offer over the past several months, but to no avail. The best I can get is 20% and $500 per acre, and even with that I have not seen any terms in writing so I might not even be able to agree to lease wording once I were to ever get to that point. But, the reason I am interjecting at this point, listening (reading) to yall's recent volley of "opinions", I am wondering what you have to say about a certain issue. One particular agency offering to lease my minerals indicated to me, that since I really don't have much to begin with, if I choose not to lease, then they will drill anyway around me and then I will just flat be out of luck!!! Then no one will ever lease me nor will I ever get anything. Is this possible? If it is then why should I be convinced to hold out for better terms with the "risk" of losing it all?

Thanks for your input- Douglass

Permalink Reply by king john on September 14, 2009 at 15:02

i would also consider what is next door and all around. many parts of shelby county are stacked with multiple pay zones some of which are just coming into play. i dont have an exact answer to your question .
i just believe that when prices come back to some form of normalcy, leases will go for a good bit more. its times like these that most of these companies are using scare and strongarm tactics to scare people into signing whatever comes their way.
these guys are right in that it is MOST important to have good lease terms in place. thats what is going to protect you and pay you.
as to wether to lease for $500 ? if the terms are right i would consider it with (my) lease terms and not a boiler plate lease.
if you have the luxory of waiting a year or two, i think it would be time well $$$pent...
kj

Permalink Reply by intrepid on September 15, 2009 at 6:27

Douglass, How small is your tract? If it's small enough that you could not find a place on it that would be at least 437 feet from the property line then you may have to take what you can get. Unless, you can form some agreement with your neighbors to partner up and lease several tracts as one offer. That's what was done in a lot of neighborhoods in urban areas. No reason it couldn't be done in rural areas with small tracts except that the neighbors may not stick together to see a deal through.

Permalink Reply by king john on September 14, 2009 at 15:19

adubu, sorry it took so long to get back to my post. i just didnt like how it sounded...
i had gone off on some tangent about when i lived in houston in the mid80s. houston, the oil center for the world was feeling the brunt of the oil crash of that time. i mean it was bad. people out of work, others losing life savings, real estate market was worse than bad. people thought it was over. there was so much vacent comercial real estate it seemed as if the city would never be able to catch up with it self..... BUT IT DID !!! and it grew by leaps and bounds. it took about ten years for the growth to get in full swing, but it did. i was making an anology between the depressed NG market of now, compared to the depressed oil market of that time.
i am simply trying to point out for some who have the time and the resources it may be a prudent choice to wait.
in regard to my recession proof job???
i have been a professional bartender for twenty three years and i love what i do !
kj

Permalink Reply by king john on September 14, 2009 at 15:29

heres a good link with a checklist for leasing...
http://www.tlma.org/oilgasleasechecklist.pdf
kj

Permalink Reply by adubu on September 15, 2009 at 0:18

King John--Agree with your advise to J above. Thanks for reply on your post. The real estate and S&L problems in late 80's was caused by tax law change of passive income. You could have brought property 20 cent on the dollar which I assume you pick some up. Presently O&G royalty has been brought by some thiefs recently due to low prices and I hope people has been educated thru this site to not let that happen to them. Thanks for reply. You probably hear many stories in your job and get some good leads. Now pour me a double!!! Look forward to next debate

Permalink Reply by king john on September 15, 2009 at 2:22

adubu, i think the s&l crash was in the 90's. here is a link to the oil crash of '86.
kj
http://www.aapg.org/explorer/2006/01jan/crash.cfm

Permalink Reply by adubu on September 15, 2009 at 9:24

KJ---the S&L crash occurred 1987-1989. I know I was director on one of the large S&L in East Texas at the time. It follow the change in the tax laws on passive income 1986.

Permalink Reply by king john on September 15, 2009 at 15:59

anybody been around long enough to know what leases were going for during the '86 crash? i bet it wasnt much and i bet the companies were using it to their advantage. the ones that were not going bankrupt atleast.
i would be willing to bet leases were aquired for pennies on the dollar because the uneducated public thought there was no way it was ever coming back to the rates they once had. when was it oil got up to $100 a barrel ? i wonder what leases were going for at that time???
kj

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