Help! I'm a Newbie!
I live in California...and I am completely uneducated about the subject of oil, gas and leasing. Recently we received an offer from Pinebelt to lease the following property in Clairborne Parish: Sect 32 T 23N R5W. Our offer was $300 per acre and 1/5 royalty, 4 year Primary Term, 3 year Option Term at $300 per acre. We are so confused....is this a good deal????Should we wait? Is there another company that is working in that area to get a comparison price?
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Replies to This Discussion
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Permalink Reply by Gale on
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Every reply I've seen to questions like yours is to hire a oil and gas attorney. We have wells that have been in productions a long time so we have been under lease, but I assure you if I had to release I would be hiring an attorney. Also I hope you understand seems companies are trying to lease everything they can in nw louisana and ne Texas, and I've seen mention that some companys are more than dishonest. Hopefully some of the people on here more familiar with these companies will reply to you. Good Luck and take your time
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Permalink Reply by mike smith on
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Gale is telling you right about the attorney,Anne. There is no way for you to properly represent your interests with nothing more than good advice or even some self study. For example being ignorant of the practice of charging you for costs in connection with producing or transporting gas could cost you big time when there is a good possibility you could have gotten the operator to absorb it. Also, another example is a vertical Pugh clause where they earn only as deep as they produce. Finally, they see you as a sheep where the experienced professional is likely superior in knowledge to the land man trying to buy the lease. I would also not agree to award an attorney an intrest in the royalty unless I found that good representation was not available without it. You might also want to check with the clerks office and see what other nearby leases have been recorded and if some were corporate owners, the terms they negotiated would be of interest. The bonus won't be shown however. That (the lease, not the bonus) is something a landman or your attorney could find very easily. Good luck.
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Permalink Reply by Mac Davis on
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Anne, how many acres is the tract being discussed?
In my opinion, even the "honest" companies are dishonest, in that they'll offer you a lease with a lot of fine print terms in it that attempt to cheat the mineral owner.
Welcome to the site, and hope it works out well for you.
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Permalink Reply by Jack Blake on
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Jack Blake is getting close to first production on his well.
His is a cost free royalty with gas price based on price recieved or market value at the wellhead whichever is higher. They may have screwed Jack with (market value at the wellhead). They may say the market value is low. Jack should have put ending of month henry hub price or something like that.
We'll see- Jack does haver the cost free part clear and am covered there.
Jack Blake is now learning about royalties ahead of time.
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