Replies to This Discussion

Permalink Reply by Steve Thibodeaux on December 3, 2010 at 8:29

Mr Blake

Could you tell me what a "cost free Royalty" is?

Thanks
Steve

Permalink Reply by Henry on December 5, 2010 at 6:15

I'll jump in here and quantify the value of a cost-free royalty. I've been collecting data on gas prices, and am finding that a cost-free royalty is a very good thing to have. For some drillers, it can save the mineral owner 50 - 75 cents per mcfe on the price of gas. That's a ton of money over the life of a well. For other drillers, the cost seems to be more around 25 - 50 cents. I don't know why some drillers seem to consistently charge more than others.

Permalink Reply by The_Baron on December 3, 2010 at 4:44

3/16 is still standard in many areas. IT is low for a lease in the HA area.

• ▶ Reply

Permalink Reply by Two Dogs, Pirate on December 3, 2010 at 13:51

Steve at the time the family signed the lease, that was the going price in that area. You were close in on the Big Woods well and the Murray well. Audubon bought protection leases from the larger mineral owners from Belmont to Pleasant Hill, just in case they hit something big in their concept play. What Jack Blake is talking about regarding cost free royalty was not included in most of these early on leases.

• ▶ Reply

Permalink Reply by The_Baron on December 6, 2010 at 8:41

Jack,
I am confused


"It really pisses Jack off when he hears of landowners getting screwed! It pisses Jack off even more when landowners are at a disadvantage due to economic, education, and knowlege"

and then
" It is the landowners responsibility to make it as fair as possible"

So, if a landowner does not make it his priority to "make it fair", and thus signs for less than ideal terms, is he really getting screwed?

Permalink Reply by Steve Thibodeaux on December 2, 2010 at 0:16

I don't know if I am at the right place, but audubon leased us for 1/16th. I know this was stupied but was caught in a financial crises and was not informed about the Haynesville.
July 2007.

It would be nice to go back and find they broke the law.

• ▶ Reply

Permalink Reply by The_Baron on December 2, 2010 at 4:51

are you sure they just didn't buy royalty?

Anyways, The mineral code rely's heavily on the freedom of contract. Entities are free to contract to whatever terms they desire, within a few limitations in the mineral code.

In LA, if you sign a document, you are presumed to have read and understood that document. While there are organizations out there that do prey on the uninformed, most are on the up and up.

With knowledge of the HA or not, I can't see anyone leasing for a 1/16. This was unheard of even 100 years ago. Are you sure its not 3/16 or a royalty sale?

• ▶ Reply

Permalink Reply by The_Baron on December 7, 2010 at 8:21

So whay be mad @ the oil company. Shouldn't you be mad at the individual who is leaping before he looks?

• ▶ Reply

Permalink Reply by PamelaC on December 1, 2010 at 11:56

So does Texas have a 1/8th minimum?

• ▶ Reply

Permalink Reply by benny688 on December 1, 2010 at 15:00

I don't really know if Texas has a minimum, but starting offers on both the Eagle Ford and Haynesville are at 1/5 (20%) and the trend is to lower the sign on bonus and to raise the royalty payment to 27.5%.

GLTA

• ▶ Reply

Permalink Reply by Harold5011 on December 3, 2010 at 4:34

I thought in Texas it's the other way around. Landowners there pay the oil companies a 3/16ths royalty, right?

• ▶ Reply

• ‹ Previous
• 1
• 2
• Next ›
• Page