Replies to This Discussion

Permalink Reply by Haleyeah on January 4, 2009 at 8:53

Maddog, maybe this will be clearer..... (from the original lease) " production from this leased premises shall maintain this lease in effect only as to depths above the stratigraphic equivalent of a depth of 100' below the deepest producing depths in a well on the leased premises or in a unit including any portion of the lands described in this lease" This language is being changed to say " as to all depths and horizons 100' below the stratigraphic equivalent of the base of the deepest productive zone or interval encountered in a well located on the leased premises or on lands unitized or pooled with the leased premises;PROVIDED HOWEVER THAT LEESEE IS NOT THEN ENGAGED IN THE DRILLING OF A WELL ON THE LEASED PREMISES OR ACREAGE UNITIZES OR POOLED THEREWITH. iN SUCH CASE THIS LEASE SHALL REMAIN IN EFFECT AS TO ALL DEPTHS FOR SO LONG AS DRILLING, REWORKING,COMPLETINGOR RECOMPLETING OPERATIONS CONTINUE WIHOUT A GAP OF MORE THAN 90 CONSECCUTIVE DAYS"

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Permalink Reply by Two Dogs, Pirate on January 4, 2009 at 9:13

They have the Haynesville Shale or any formation below it with the original clause. Like my first post said I would try to get anything above released back to you in any negotiation you have with them. Others may add to what I am saying but any hope of renegotiating the Haynesville at big bucks figures is out. If HK decides to put a verticle into the top of the Smackover and gets production then they have you from 100 ft below that depth all the way back up unless you have another clause that cuts from above also.

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Permalink Reply by Two Dogs, Pirate on January 4, 2009 at 9:51

Earl, without looking into the whole deal then who knows but the clause gives them the right to go to China and cut it off 100 foot below China and hold everything back up the hole. All they got to do is get production from China. I don't know what HK is up to but maybe the shale zone is 500 feet thick, including the lower CV, Haynesville, Buckner, Gilmer and the upper Smackover, the clause ties things to a 100 ft below production. Which is better for the mineral owner than say 100 ft below the formation. If HK drills vertically into the Smack and gets production then its all theirs. If it is important enough to HK, then they may boost the royalty up and give an above cut off but if it requires then to fork $15,000 to $20,000 per acre then why not drill into the upper Smack with a cheap well and get it all. Chances are probably high at getting something at a low depth in Webster Parish all they have to do is go to the base and perf. Whatever that base may be.

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Permalink Reply by Bobi Carr ("parker") on January 4, 2009 at 8:50

Haleyeah,

Think of Pinacle as a mugger. They mugged you the first time. They fenced the goods to Petrohawk for good money. Now Petrohawk is coming back and saying "Hey Pinacle only got your wallet, we think they should have stolen your jewelry too. So why don't you just go ahead and hand it over to us".

I think if I were you I would say Haleno instead of Haleyeah.

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Permalink Reply by Cathaus on January 4, 2009 at 8:56

That was a great one Parker!!

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Permalink Reply by Bobi Carr ("parker") on January 4, 2009 at 9:13

Haleyeah,

Don't leave out your other shale mates. Find out who in your section signed with Pinacle and form a group with these people.

It will help you and help them.

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Permalink Reply by Snake Stewart on January 4, 2009 at 9:30

To anyone contemplating verbage change per rewording an ,already signed , bad lease, without consideration.... Run Forrest !!!


The discussion 2Dogs is refering to was started by Cross Creek in the Webster Parish group.
If they didnt get it right the first time, what makes you think they will get it right this time. They do this for a living. I can assure you that they wont be willing to re-do the thousands of leases that the landowners didnt get right.
Please dont let them scare you with that least resistance crap. If you trust them to do the right thing then sign away. If not, tell them to skidaddle.

If you signed in March, you got a fairly standard O&G lease, that is favoring them, I am quite sure. The pugh clause is the only thing you have that may or may not get you some help later on. Give that up and you might as well donate the rest to charity depending on how much land you have. Not trying to be mean but these guys play for keeps. We have to take on the same mentality if we want to provide the best that we can for our families and future generations.

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Permalink Reply by intrepid on January 4, 2009 at 16:00

If they want to amend the lease there should be 'consideration' in it for you.

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Permalink Reply by Randy on January 4, 2009 at 17:38

Thats a great point. I'm going to steal it. I'll reference you.

By the way, get in touch with me.

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Permalink Reply by The_Baron on January 5, 2009 at 4:05

Even if it meant that the deeper depths are never going to be drilled?

While I too would want some consideration, I would rather have the entire shale below my land explored. Say the pugh clause prevents the existiong leaseholder from exploiting the shale at all depths, but limits others (by only leaving a fraction of the shale unleased) from exploiting it?

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Permalink Reply by The_Baron on January 5, 2009 at 6:35

I agree with you this time KB, I just want to point out that trying to squeeze more money ou may not be in the best intsrests of the mineral owner if it limits what depths may be explored.

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