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
do you think you could look at the lease to see if im being played
Randall Davidson is the best. Fair and honest.
I will second that, give him a call. No matter what, you will learn much and can put things in perspective.
You really need to use an experienced oil and gas lawyer. I used Grant Summers of Davidson, Jones & Summers, Shreveport. He wrote my leases. He is an experienced oil and gas lawyer. I've been quite pleased with his work.
john, Clark Energy is neither a driller nor an operator. Clark Energy is a land company offering lease terms on behalf of a client who might be an operator. Might be an investor. You can ask. They may tell you, they may not. I suggest you heed the good advise offered by the members and engage the services of an experienced O&G attorney. Either Randy Davidson or Grant Summers would be good choices.
That's what I was referring to when I mentioned investors. A more polite term for a flipper. LOL! It is relatively common for flippers to get stuck with a lease they can't assign. Sometimes it's not just one lease or a few hundred or thousands of dollars. Sometimes it's dozens or hundreds of leases and millions of dollars. It can be a very risky way to "invest" in O&G. Since an operator must honor the terms of any lease they force pool or include in a lease well the terms are the important part. I agree that the offer is not up to par for the location.
Last time I saw Clark energy involved in anything it was with Camterra energy.
Ask Jay what his opinion of Camterra is.
My opinion of Camterra is that anyone who is signed up with them would thank their lucky stars to be signed up with Chesapeake instead. If you have been on here for any amount of time you will understand the gravity of that statement.
Keep shopping, Clark is not a driller or energy producer but a lease broker and you have no earthly idea where the lease will land. Regardless of who you are dealing with seek advice from an experienced O&G Land Attorney before signing anything.
That said $300 and 1/5 are both a joke.
So you have no other offers, they aren't going after the Haynesville (which is what surface to top of Haynesville means), and your area is "home to the failed Debroeck well" = don't listen to anyone telling you to just throw the offer in the bin or telling you it's a joke. I believe one of these same people said "throw it in the bin, it's a joke" then later said "if they aren't going for the Haynesville then I'd take $250/acre @ 1/4". Crap like this makes me sick. You have an OFFER to lease and offers can be negotiated. I wouldn't listen to anyone immediately saying take less bonus money to up the royalty; while this is how it normally would play out.....you should at least try for MORE bonus money and MORE royalty before settling. You really shouldn't even be subjected to such nonsense as someone putting $250 @ 1/4 in your head because you should be trying for more.
Sadly, if you don't have any other offers then you don't have much leverage in negotiating and if you only have one offer then after you pass and the company moves on then you'd be thinking $300/acre for 125 acres sounded pretty good. You haven't even mentioned how long the primary term is or if they are requesting an option and, if so, how long and at what amount. As we all know, the Haynesville is a deep formation so even granting Surface to Top of the Haynesville is covering a lot of depth. Also, if the company is flipping then it's going to be a little harder to squeeze out 25% royalties as the NRI right off the bat is going to be 75% to the Assignee which isn't very attractive.
Get off this board and talk to a lawyer like some have suggested. The other 95% of the info you're going to get on this board is going to do nothing but cause you a headache and make you second guess everything. Do what feels right to you after you seek sound, professional advice.
The primary lease is 3 years, thanks for the advice
I live in San Antonio and am planning on going
to Shreveport on Next week to meet with
an O and G lawyer. Since they are not drilling vey
far, do you think its oil they are after?