I have a small tract, ~4 acres, in township 20. Recently been offered $400 per acre for 3 years with an option for 2 more by HEP Energy. There is a royalty of 22.5%. Seems low to me. Does anyone have any experience with them?
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There are four Township 20's in Bossier Parish. What is the Range? It would be 20N-11W, 20N-12W, 20N-13W or 20N-14W.
Name | Type | City | Status |
HEP ENERGY, INC. | Business Corporation | LAFAYETTE | Active |
Business: | HEP ENERGY, INC. |
Charter Number: | 34861947 D |
Registration Date: | 11/22/1999 |
Domicile Address | |
118 DEMANADE BLVD. | |
LAFAYETTE, LA 70503 |
Mailing Address | |
C/O GARY L. SALMON | |
118 DEMANADE BLVD. | |
LAFAYETTE, LA 70503 |
Status | |
Status: | Active |
Annual Report Status: | In Good Standing |
File Date: | 11/22/1999 |
Last Report Filed: | 11/10/2011 |
Type: | Business Corporation |
Registered Agent(s) |
|
Officer(s) | Additional Officers: No |
Officer: | GARY L. SALMON |
Title: | Director |
Address 1: | 118 DEMANADE BLVD. |
City, State, Zip: | LAFAYETTE, LA 70503 |
HEP is a reputable land company. You are still responsible for your own due diligence and decision to enter into a lease based on the terms. Without knowing any particulars regarding your mineral interest, the terms are good. Actually above average for that general area. It would be nice to know what company HEP is representing and it doesn't hurt to ask. I suggest you post this in the North Caddo and Bossier groups.
Thank you. Will do. I know that there have been recommendations for law firms that have considerable experience in evaluating O&G leases, but I can't find them at the moment (actually live in the Dallas metropolitan area). Any recommendations, and range of what can be expected to be paid to review a standard lease?
How many mineral acres are involved, approximately?
Good offer for that area, ask for a vertical pugh.
For your modest mineral interest I think you can negotiate and execute your own lease with a little homework. The Baron has started you in the right direction with a vertical Pugh clause (depth restriction). Your acreage is too small to need a horizontal Pugh clause. I'm unsure why you think 22.5% is a low royalty. It's actually a very high royalty. 25% is the top current royalty for proven, unconventional plays. 20N - 14W doesn't fit that category at this time but it never hurts to ask.
For a small acre do-it-yourself Lessor, the following are good (IMHO):
Cost free royalty, no surface clause ( since it is small acreage, but not ultimately necessary depending on your circumstances), pugh clauses (use both just in case land could end up in two units), no option. Possibly a maximum shut-in aggregate (2-3 yrs).
There are many, many other clauses, but no surface clause will cover a good bit of those, then Pughs and no cost can be important.
Probably not much upside to that bonus without some proven wells.
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