Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on November 1, 2010 at 12:43

As I mention above, only minerals scheduled for near term drilling are receiving offers such as yours.

Permalink Reply by Linda Whatley on November 1, 2010 at 15:21

It's funny cause I knew I had an undivided interest in .40 acres undery Hwy 171 in the Trenton area, and had just about decided to go unleased. Then Chesapeake called and informed me that they had discovered I had an undivided interest in a few more acres in the southeastern part of DeSoto Parish in Section 1 T12 R12. I had already leased several hundered acres in that area back in 2008, but knew I probably had some some more mineral rights somewhere underneath roadways, but wasn't sure where they were. Anyway, I got them to combine both undivided interests in one lease. ...... guess I did good, uh!

Permalink Reply by Ezra on December 6, 2010 at 6:24

Skip,
I've received the following offers:
Aug.27...Sec.14-11-11 10A tract $5000/A 1/4 royalty 3yr lease
Dec.1.....Sec.15-12-12 10A tract $6500/A 1/4 3yr
Both offers from Chesapeake.
Is this the going rate for these areas?
Thanks.

Permalink Reply by Skip Peel - Mineral Consultant on December 6, 2010 at 6:51

I find the offers to be in line with what I am seeing in those areas of the Play. Actually I'm surprised that offers have remained steady at this level considering the current economic dynamics. For 10 acre tracts, I find them more than acceptable as long as they contain the requisite vertical and horizontal Pugh clauses. S14 - 11N - 11W is a Samson Contour Unit but Chesapeake will likely operate it. There are no producing wells so Chesapeake will almost certainly drill before the earliest leases begin to expire. The S15 - 12N - 12W is a better offer because Chesapeake just spudded a well on Dec. 1. Remember you can lease at any time even after the well is complete. With that in mind, I suggest that you consider asking for a no-cost royalty on both leases and let the landman know that your ready to sign now if you can get that. If they balk, I think you can afford to wait until next year to make a decision. Wish em a Happy Holiday and tell em you'll get back to em next year. If you prefer not to wait and negotiate further, that's okay as these are good offers.

Permalink Reply by Tahoe on December 6, 2010 at 8:26

Section 14 T11N R13W... Trenton Field. Bonus offer was $2,500/acre with 25% Royalty. Offered by EOG Resources. I tried to negotiate a no cost royalty clause but the landman wouldn't budge. I did not take this offer. We are currently unleased in this section. Their last offer was in late August.

Permalink Reply by Skip Peel - Mineral Consultant on December 6, 2010 at 8:38

I always suggest looking for opportunities to negotiate a no cost royalty. Under the current conditions it helps to be unleased in a unit being drilled. Section 14 is an EOG unit. There is no need for them to give you a no cost royalty at this time. Since your section is not Held By Production, they will have to drill before their existing leases begin to expire. I suggest that you wait until they spud a well before any future negotiations. Of course you don't mention the size of your mineral acreage which is also important. Every situation is different and it's not wise to make decisions not based on all the details. For those with sufficient acreage and no other negotiating leverage who desire a no cost royalty clause, you might try offering to take a smaller bonus.

Permalink Reply by Tahoe on December 6, 2010 at 8:44

Oh yeah. It's only 10 acres so I'm not too concerned about it right now. There isn't anything permitted so I am happy to wait to see what happens in the future. We're in no rush.

Permalink Reply by Shayne S on December 12, 2010 at 9:01

not sure if it is south east desoto but 9-t11n-r11w first offer $3500 25% on ~23 acres chesapeake i think but with a bad renewal

Permalink Reply by Two Dogs, Pirate on December 12, 2010 at 9:17

It was Petrohawk and the property is located in Southeast DeSoto, close to the Red River and Natchitoches Parish lines. The 2 year option to extend was 2/3 the original signing bonus. This property lies within the fence line of the Dolet Hills coal mine.

Permalink Reply by Shayne S on December 12, 2010 at 9:30

isn't it usually better not to have an automatic renewal?  does the coal mine have a play or present problems?  Havn't read the offer yet myself but will this afternoon, and have a scheduled conference call with the rest of the owners in the next day or soo

Permalink Reply by Two Dogs, Pirate on December 12, 2010 at 9:37

I thought you were talking about the old offer of over a year ago. It actually got up to around $6000 at one point then the project was shut down. Yes the coal mine presents a problem. Good luck in your new deal. 

Permalink Reply by Shayne S on December 12, 2010 at 9:47

what kind of problems?  would it mean a lower bonus per?  yeah this is a new recent offer but we havn't countered yet, just got emailed a copy of the offer so i can see what all it has with it. 

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