Replies to This Discussion

Permalink Reply by Terry on October 14, 2008 at 3:20

I agree. I think 25% is a reasonable request. I would also lean towards a less than five year agreement, which they are proposing now. Even though they say they are interested in drilling early next year, they could sit on it for a long time if we allow them to.

Thanks Eric,
Terry

Permalink Reply by Eric on October 14, 2008 at 3:27

I also agree that in the end the percentage on royalties is where the money is. I also think that if the 2 year option at the end is negotiated at a higher rate it motivates the company to drill. With the current economic situation I think a 500, 25% 3 year with a option of 1500, 25% would be beneficial to everyone concerned.

Permalink Reply by Gone Fishin on October 15, 2008 at 3:03

25% is minimum. But if you think 500 or 1500 is ok, you've bumped your head. This is why the land men have an advantage over us. We listen to folks who have no clue as to what they are talking about. Rather than seeking out good council and paying someone who actually knows for their knowledge. If you had a million dollars worth of timber would you sell it for 500. and 25% of what they sell it for. And if the economy had a bump oh! somebody give me something for it please!!!! anything. If timber prices go down, you wait. if you dont seek advice from a good timber consultant, you'll get ripped off. thats the facts.

Permalink Reply by C L Roberts on April 17, 2009 at 11:17

My mother just got an offer for 500/acre, 25% royalty, and a drilling rig for 15,000.

Is this a bad offer to go for?

Also, the landman said if we don't go for this, then they will move the drilling rig south and redraw the unit to exclude us.

My family hasn't leased the land to anyone and I never even knew we were in a unit until now. Any ideas?

Permalink Reply by Sarah on April 17, 2009 at 11:34

I'll pm you. I would say that's a bad offer.

Permalink Reply by intrepid on April 17, 2009 at 14:46

C L, The bonus is low but a lot of bonus offers are now. At least initially. The 25% is not out of line. This their first offer? If it is then they expect a reasonable counter. A lot will enter into it. The size of your tract? Depth limitations? Have you checked out some of the threads on this site concerning lease terms? Had a lawyer reviewed the lease they presented? What company is it? What abstract is the property in? Does she own all the minerals in her tract?

Permalink Reply by Sarah on April 18, 2009 at 10:48

I'm glad you said this. Thanks.

Permalink Reply by Lee Davis on October 20, 2008 at 5:18

Eric
We are trying to look at securing a place in the unit before we sign anything. We feel this is the important thing to consider. Energy Companies can agree to anything but if we are left out of a unit -we are not getting anything in the future.

What has been going on lately with leases? I got a platt of where we have mineral rights in Shelby county and who owns land around us. This is a pain to deal with three states away.

Permalink Reply by Eric on October 15, 2008 at 9:34

While I am stuck on the 25% royalties, I also realize with the news concerning downsizing and all I would prefer the royalties and what I feel is a certain possibility of it being drilled. While I dont want to be taken advantage of I also understand that my wifes 4.1 acres that is a part of a 50 acre family thing negates some of the negotiating leverage that larger land/MR owners have. As mentioned in other post, our bills are paid and anything that comes from this wasn't anticipated 5-6 weeks ago. While I agree that it could impat our life somewhat, I believe it would impact my grandchildren life more.

Permalink Reply by SPYDERGT on November 21, 2008 at 17:49

I have 4.5 acres in the James Community in Shelby County, TX. I would be interested to know if anyone is contacted about leasing MR. I understand that things might look better after the new year and after the inauguration. Chesapeake backed out on some contracts this month at $5K ac and 25%. I have not been contacted by anyone, but would be interested. I've been following the conversations, trying to stay abreast of any activity in my area. I would appreciate any input.
Thanks,
SPYDER GT

Permalink Reply by Terry on October 14, 2008 at 4:53

Hi Eric - I'll run it by Beta to see what they say. Will keep you posted.

Permalink Reply by Terry on October 15, 2008 at 11:49

Paige - The # I got from Southwestern's website (www.swn.com) is 281.618.4700. If you hear anything back please let me know.

Thanks!
Terry

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