Replies to This Discussion

Permalink Reply by Charmine on October 16, 2008 at 3:55

Gone Fishin- Given the large amounts of land leased up by CHK, do you think it is better to take an offer from a smaller o/g company? Provided it is good terms of course! Given that the real goal is to get drilled and start receiving royalties asap. So many people say that CHK can never get it all drilled before the leases expire. Seems to me if one chose to sign with CHK, that one should make sure the terms are at 3 years, with a higher 2 year option.

Permalink Reply by Gone Fishin on October 16, 2008 at 5:09

I think Cpk and Devon will own it all eventually and the small companies know that so they are buying cheap and drilling to hold by production till that happens. Cpk and Devon know that they will have to pay top dollar to get it from them so they would prefer to pay you directly to avoid that. Fact is they dont have the capitol to buy up this whole play at once. This play has more gas and oil per acre than any other. They will have it all as soon as possible. They'll get it drilled. Drill to hold, not necessarily to produce. the limiting is in the pipelines.
Heres the deal, no matter who you sign a lease with, the terms are the terms. the more middle men inbetween you and the top dog (devon , cpk, xom, or whoever ends up with the lease) the less they will be willing to give. now if you lease to someone say puts a small well on 700ac. and holds you by production of a little gas can you guess how small your check will be. and now you have no way of getting out of that lease for the rest of your life. it is gone gone gone. You have to either 1 get a substancial bonus and wait for the royalty over the long haul or sign a lease with favorable terms to you on (drill now drill deep). no holding large tracts with just a small well. vertical and horizontal severences etc.

Permalink Reply by Charmine on August 12, 2009 at 11:41

Hiya Gone Fishin! They are after me again, as you can see from my post today. I have surprisingly retained most of what I learned last fall. I have one lingering question. You said above, "You have to either 1 get a substancial bonus and wait for the royalty over the long haul or sign a lease with favorable terms to you on (drill now drill deep). no holding large tracts with just a small well. vertical and horizontal severences etc." Drill now, drill deep is what I've been pondering today. What is the likelyhood of getting that in a contract. I can get the vertical pugh, but what about the guarantee drill? I thought there was no guarantee. Is it possible to get a guarantee to drill?

Permalink Reply by Alexus on October 20, 2008 at 8:14

I am curious what kind of offers you are getting now? With the price of natural gas being cut in half, have your offers been cut in half as well? I do know that CHK is rescinding many offers in multiple HS Counties and may be honoring offers of $1000/acre in other Counties that are much hotter. I guess holding out isn't always the best option.....

Permalink Reply by Gone Fishin on October 20, 2008 at 13:15

Depends on what you are holding out for. If you are looking for a fair price for whatever you are selling then holding out is the right thing to do. If you think of it like you are getting something for nothing and trying to get rich well, you'll get whatever they'll give and be happy you got it. I'm not sure I want them selling my gas at this price anyway. I'm not selling my 401k or my gas at bottom prices and it doesnt appear warren buffett is either.
Yes it would be nice to have a fat wallet right now. If you live in lousiana where they were quibbling over the difference in 25K vs. 27k an acre bonus well I think thats a mistake. Yes they should have leased. But at least in my part of shelby co. the offers arent even close to where they should be. Now I would be willing to lower my bonus amount for an increase in royalty. If you want to know how much it is worth just try to get whoever is leasing to bump up the royalty % by a few %. When they look at you like you've bumped your head You'll soon realize just how much money is at stake. I personally want to lease. I am right in the middle of NFR's piece of the play with 300+ acres. I'll gladly lease to whoever gives me a good offer. I just dont see that happening as long as people are leasing for less and there is still so much land unleased. A few months ago I wondered if i was in the play. now I know we are. the only question is who will lease it. I figure if nobody does I'll go in with an independent as a participating interest.
Make your own decision. Whether you lease for 2k or 20k. 25% or 27% you are the only one to blame for your mistakes. you can also take pride in your victories.
good luck

Permalink Reply by MARG on July 28, 2009 at 18:27

Do you mind sharing the general location you are discussing above? Neither La. nor the ones in the Barnett Shale had to hold out as it seemed, from the ones I spoke with. that the very good offers were there from the beginning--companies were ready to begin, etc. Of course, the economy was better. I do not like to see us sell the gas at these cheap prices as it depletes supply, etc. I would hope that they would sell enough to give us an allowance as they do need to meet their current expenses in the budgets, etc. I would like to see them sell only those amounts; the price might increase due to supply and demand then.

Permalink Reply by MARG on July 28, 2009 at 18:14

I have not heard many good offers recently. I have had calls from individuals who live out of the southern states, etc. and they wanted to know about $800 or $1500 an acree. I advised them to hold out as I definitely felt that it was not an appropriate amount.



Do you mind sharing where (in general) your mineral rights are?

Permalink Reply by Adam on July 29, 2009 at 1:29

J. Armstreet,

Out of strict curiosity, what is the right price? Not trying to antagonize. It is just good info for us landmen to know. To have a feel of what people want to report back to the higher ups.

Thanks

Adam

Permalink Reply by max73 on July 29, 2009 at 2:55

My family had a bona fide offer of $5000.00 x 25% x 3 yrs - late Sept / early Oct - we executed / notarized / consummated the deal - turned in the paperwork - got cold drafted - I know for a fact our title is perfect - no mtg etc. - it was a blatant "welch" - I have everything documented in email archive - I'm not sure what we would take now - there are two changes from Oct 08 to now ............. the price of natural gas, and history tells us that will change again - the continued exploration is proving the targeted formation is there and in places there are multiple formations and pay zones ………. Information only gets better. Another consideration …………. As most have read on GHS – CHK / Burk failed acquisition – the price was substantially higher for a single formation ……….. so maybe we settled two low ????

Permalink Reply by Charmine on August 3, 2009 at 11:08

Hi Adam...Haven't been on here in months, nor has my phone rang in months. I still want to lease. What is going on in the area? I just logged back on, and haven't had time to check on the updates yet. Thanks, Charmine

Permalink Reply by Charmine on August 3, 2009 at 11:07

Hi J Armstrong- my particular chunk is in Shelby County, about 5 miles north east of Center in the John Forsythe Survey

Permalink Reply by Jimmy on August 6, 2009 at 10:54

Yeah, here we go again. Does everybody realize why this website is here? It is because of the magnitude of the shale. With that in mind, dont allow these companies to take advantage of the economy and slap you with a low offer. Do not let people rob you of your assets, they are yours so dont give them away.
Our family has seen the complete contrast with their offers: from 300 per acre to over 5000 per acre on the same tract! Remember, commision is the salesman's game and jets are the corporate taxi. Dont settle for a new couch while sending these companies to Tahiti for a meeting to talk about your gas wells.

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