Replies to This Discussion

Permalink Reply by obed w odom on December 12, 2011 at 17:38

Of course they do.

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Permalink Reply by The_Baron on December 13, 2011 at 5:35

Kittycat:

 

The extension is only a pre-negotiated option.

 

They an just let the lease go and hope to re-negotiate, of course it would open to anyone who wanted to lease. Or they can just let it go unleased. and force pool and drill the interest anyways.

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Permalink Reply by Greedy Landowner on December 13, 2011 at 7:17

You are correct, the option is their's if they would like to extend. Each section has its own unique set of financial circumstances so its difficult to generalize a yes or no answer on lease extensions and apply it to the entire Haynesville.

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Permalink Reply by P.G. on December 13, 2011 at 12:08

Could it be advantageous to a driller to allow a percentage of acreage go unleased so they could use the money they would have been paying out in royalties to be applied to the expense of the well? Especially since NG is so low priced?

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Permalink Reply by Greedy Landowner on December 13, 2011 at 12:52

I dont think so because after the well reaches payout the operator loses that income from the unleased owner and pays the owner 100% of their share of production proceeds minus production costs and supervision fees. With the leased owner they retain at least 75% of production proceeds. Long term the operator would lose more money doing it as you have described.

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Permalink Reply by P.G. on December 13, 2011 at 14:24

Yes...but they still drill when there are some that haven't been leased or leases expired...

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Permalink Reply by Greedy Landowner on December 13, 2011 at 14:49

definately

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