advice needed on lease offer in S. Caddo offered by Clark Energy

We have long waited for any thing positive to come from

our 125 acres in Section 33  16n-13w in S. Caddo Elm Grove, home to the failed

Debroeck well.  We were recently offered a lease which would

pay 300 dollars an acre and Royalties at 1/5 of any

producing minerals.  The drillers state that the lease will only cover

minerals produced from "the surface of the earth to the top of the

Haynesville formation",  What might that mean that they are

drilling for?and is 300 with a 1/5th royalty a fair deal?. Any advice would be

appreciated.

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Permalink Reply by Joe Aldridge on April 14, 2013 at 0:16

It looks like its a paid-up lease, how many years you don't state or I missed in an earlier post, and they can sit on you unless you can prove you are being drained. That may be hard to do unless you hire a geologist to prove they are draining you and then go to court to either break the lease or require drilling. Again personally, I would not sign a three year lease with no rental, much less one with a two year option at the current rate. I'm getting toooooo old to be sitting around waiting 3-5 years for someone to do something. That's just me and the way I look at leasing. 

Permalink Reply by Joe Aldridge on April 13, 2013 at 23:39

John,

I have read with interest the posts to this thread. First, I have people come to me seeking advice on leasing in the Northern portion of East Baton Rouge Parish. I have no idea what their situation is. So the first thing I tell them is I don't and won't give advice about what they should take or not take. I only tell them what I know about the person or company offering the lease and what they are possibly looking for. Other than that I counsel that they should seek a O&G attorney to counsel them if they have acreage that would have considerable income from royalties. I think it would be worth your while to seek that professional advice. Again, In your case I would try to work with the landman and your O&G counsel and see if you can get the royalty up to 1/4 with a good strong lease. That would be the primary objective if it were me. Also, if this lease is to the "Top of the HA" then don't allow them to stick the +100 ft clause in the lease. That would be my primary concern that its a sham to include the HA through a "back door". Good Luck and I hope you get a good lease and a well.

Permalink Reply by Skip Peel - Mineral Consultant on April 14, 2013 at 12:48

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