Advice on Leasing
I could use some input/advice. We recieved a letter from Pride Oil & Gas Properties Inc, on behalf of Encana Oil & Gas, wanting to lease two lots that total aprox half an acre. The offer is $5000 bonus for Primary Term/per net Acre, for 3 yrs at 25% royalties. The well has already been drilled and is waiting on Pipeline, well Serial # 240710, is this a fair offer, should I or could i possibly negotiate a little higher bonus, or stay unleased or just accept their offer. Thanks for any Help.
Harold
Harold
Views: 142
Replies to This Discussion
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Permalink Reply by adubu on -
with only 1/2 acre of minerals it's a fair offer with 25% royalty---you can ask for royalty free gas clause may or may not get it I would negotiate for that-give it couple days for landman to run that by his boss-- but take the bonus and the 25% r---with only 1/2 a it is not worth the headacre of going ULMO or fighting for more bonus,etc. I would take the offer it's fair IMO
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Permalink Reply by Harold (t12n r9w s6) on
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if you dont mind my asking, what is a royalty free gas clause
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Permalink Reply by redrivergal on
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Harold,
I assume you're referring to your lot in Edgefield, Red River Parish. I also assume adubu is referring to a cost free (to the lessor, that is--that would be you) clause in the lease that you can ask for where EnCana and Centerpoint (the pipeline company in this area) don't charge you for gas transportation costs, processing, gathering fees, gathering fuel charges, treating fees, processing fuel charges, and whatever in the heck else they can think of to deduct from your royalty checks. They don't just "nickel and dime you to death" as the old saying goes; they "dollar" you to death. You may or may not be able to get that clause in your lease (don't know what EnCana is doing on that these days). You sure won't get it in your lease if you don't ask, though. While those charges might be small on a 1/2 acre property, they do finally add up especially if they eventually drill 8 wells or more in a section in the coming years.
You should take that offer of $5000/ac and run with it to the bank. It's fair, especially the 25% part. You probably won't get any better offer than that from EnCana right now. It sure beats $100 an acre and 3/16 that many of us leased for back in the "good ole days" in 2005. The well (Caney Creek Land 6H on Tremmell Almond property) is reported to be a very good one, by the way, (unofficially, of course, at this time since there is nothing reported on SONRIS yet)). All those Edgefield property owners will be royalty owners one way or the other (leased or unleased). That's exciting!
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Permalink Reply by redrivergal on
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I should have started out my reply above with "IANAL", I AM NOT A LAWYER! Don't pretend to be and don't pretend to be offering any legal advice, just maybe some helpful info.
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Permalink Reply by Caiman on
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Red ,did it ever occur to you that Harold didn't want his location printed and possibly hesitant to use these sites because of loss of the control over his privacy.That was his choice,now he has to wonder where you got the information and exactly why.
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Permalink Reply by redrivergal on
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Caiman,
I would never reveal any information about someone that is not readily available on this site, on SONRIS, or somewhere else. That would not be appropriate. Anything that I mentioned in my reply was already available to anyone reading GHS. That includes the location of Harold's property. That's included in his name, harold (t12n r9w, s6). Any one can look up that location on a map. That could not possibly be a secret. He previously told us on this site exactly where his property is located (the street name in Edgefield and approximate location in the subdivision), what kind of work he does, his employer's name, his current work location and general location of where he now lives. In his question yesterday , he mentioned the well # 240710. Information about that well, including the well name, is readily available to any one on SONRIS or through various informal sources in Coushatta. Apologies to our friend Harold for talkin' about you! (Good luck, Harold, on your quest for the pot of gold at the end of your lease!)
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Permalink Reply by Caiman on
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No offense intended , it's obvious from your post you totally missed my point.
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Permalink Reply by redrivergal on
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Caiman,
You're right. I guess I missed your point. Like Baron says, what is your point?
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Permalink Reply by AJ on
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Harold,
First I want to say that I am not trying to steal this thread from you. I hope that no one takes offense.
I am in a similar situation. A company is offering me $4000/acre with 20% royalty and won't budge.
The amounts that they are offering you seem fair to me and that is what I have been seeking. I have heard these rates in other recent threads and it seems to be a good rate for now. This is only my opinion. I am just a simple landowner. I am letting you know that others are having a hard time getting the offer that you have. Best of luck to you.
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Permalink Reply by Skip Peel - Mineral Consultant on -
AJ, where are your minerals located?
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