Replies to This Discussion

Permalink Reply by Jaime T on August 7, 2008 at 4:15

I have read the discussions on this forum as well as the HB 1128 and RS 30:10. That is the very reason I am still confused. They seem to contradict each other. And alot or reputable members of this forum say yes the 200% penality does apply to the unleased non-consenting landowner. If you say it does NOT apply to the unleased landowner, just who DOES this 200% penality apply to?

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Permalink Reply by Jaime T on August 7, 2008 at 15:32

HI Linda, Please excuse me, but I'm trying to get a handle on what is the difference between the two, the non-consenting working interest owner and the unleased landowner. I thought that if I don't agree to the lease terms, I will be notified by certified mail to give me the choise of becoming either a consenting or non-consenting working partner. If I chose non-consent, then isn't that the same as being unleased?

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Permalink Reply by Johnson on August 8, 2008 at 6:10

GREAT explanation !! Thank you very much !

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Permalink Reply by Johnson on August 6, 2008 at 15:52

I have another question. What benifit is there to going consent instead of non-consent?

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Permalink Reply by Snake Stewart on August 6, 2008 at 16:48

Going consent you do not wait for payout. You have already paid. You bypass letting O&G's figure out how long to hold your money and how much.

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Permalink Reply by Johnson on August 6, 2008 at 17:15

If you go consent they estimate how much money you will have to pay them for the cost of drilling the well. You send them a check for that amount. Then when the well starts producing you get paid from the get go.

If you go non-consent you never send them any money, and they start paying you after expenses are paid.

It seems like a wash to me? Only difference being your risk you money by going consent, and risk their money by going non-consent. Am I making sense?

Seems like the end result is the same either way.....only one way you minimize your risk.

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Permalink Reply by Hoosier Daddy on August 6, 2008 at 17:34

Agree, Johnson. I don't see why anyone would chose consent over non-consent.

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Permalink Reply by Johnson on August 7, 2008 at 4:27

Good point. In my case I only have an acre and a half.....so that wouldn't be a problem. I would guess most in my section will lease.

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Permalink Reply by Les Bamburg on August 7, 2008 at 1:18

Johnson, you are almost correct. If you consent you would get billed on a monthly basis for your share of actual costs as they are incurred. So the initial drilling costs may get billed over a 3-month time period. The AFE does provide an estimate but you are charged actual cost. Personally I would never consent a well and take on the risk.

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Permalink Reply by Grillin' - MmmMmm on August 7, 2008 at 1:51

The operator has the option to "cash call" you and require the money up front, I believe. In either case, unless you are a very wealthy person, it is not a smart idea for a landowner to consent on a well as a non-leased mineral owner. The risks are very high and the costs are very high. While everyone is all fired up about the well results being published, there are some "dog" wells being drilled that never payout. Someone posted a well result the other day showing 320 mcf/d as an initial rate. If you had to pay 2% of a $4MM well ($80,000) and then saw those results, you may not be very happy! Most landowners shouldn't be investing in drilling oil wells. They are not liquid enough and they are not informed enough.

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Permalink Reply by Johnson on August 7, 2008 at 4:26

OK....now someone is saying again that there is a 200% penalty.

Someone please clear this up !!!

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Permalink Reply by po boy on August 10, 2008 at 11:14

I Think simply stated. If you do not agree to be responsible for the cost, you can not be held responsible for the cost.

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