I'm trying to get a sense for where the mineral owning community is today in terms of what are their frustrations and what are their needs?

Are these evolving or have they stayed essentially the same? I know there are the issues that remain the same, i.e. Royalty deductions etc, but what else is on your radar and what would you change? Either post below or email me at keith@shaleforum.com.

Views: 3691

Reply to This

Replies to This Discussion


Where do I start?  I will start with the lack of laws that protect the mineral/royalty owner.  For instance in Texas, the basic Texas Natural Resources Code that allows a royalty owner to request the minimum royalty pay level at $25.00 gets overridden by (some, not the majority) of Operator/Gatherers because they say their "office policy" only allow them to set the minimum at $100.  Others say the "software program" will not allow it to be set below $100.00.   The employees are not educated on the law.   Like I said, where do I start?  

For various reasons some mineral owners remained unleased through the first round of leasing in the early days of the Haynesville.  Now that operators are coming back and drilling CUL's, I feel a second leasing opportunity should be offered.  I have approached operators with a lease request, (even leases that contain zero signing bonus, a less than desirable royalty %, and no mineral owner protection clauses,) only to be told "not interested."  I know Skip lobbied for some mineral code language regarding issue, but was unsuccessful.  This is frustrating to me.

Im not familiar with that TX law. Are you saying they don't have to send a royalty check until payout hits $25?

If Texas has a law regarding a minimum amount for a royalty check, I've never heard of it.  There is no such law in Louisiana. It is the operating companies that make the policy regarding the minimum amount for cutting a check.  They all have a minimum although the amount may vary and most will only send a check based a full quarter year of production.  So once every three, six, nine or twelve months.

I still get a monthly check from one company for less than $4... a very old lease.  A few other companies wait until the total reaches $100.  All Texas leases.  

Texas Natural Resources Code 91.402

(f) Payment may be remitted to a payee annually for the aggregate of up to 12 months' accumulation of proceeds if the payor owes the payee a total amount of $100 or less for production from all oil or gas wells for which the payor must pay the payee.  However, the payor may hold accumulated proceeds of less than $10 until production ceases or the payor's responsibility for making payment for production ceases, whichever occurs first.  On the written request of the payee, the payor shall remit payment of accumulated proceeds to the payee annually if the payor owes the payee less than $10.  On the written request of the payee, the payor shall remit payment of proceeds to the payee monthly if the payor owes the payee more than $25 but less than $100.

My frustrations started when I tried to get a lease with the language mentioned in this forum. I joined GHS when there were only 25 or so members. I should have signed a lease back in 2008-2009. The well on my section has been up and running since 2010. I've been told the well has not paid for itself and have not seen a penny. The quarterly reports list many line items I have no way of knowing if they can be legally deducted. I have not located one site that lists what can and cannot be deducted. I have even asked for a lease without bonus but they are not interested. Why would they? I am sure BHPB will continue to tell me no money is payable even though they continue to pay their leasors out of the profit they report. Would love for you to look at a quarterly report and give me your thoughts. Seems I've missed out, should have signed early, and now have no recourse. The land is 5+ acres, and rides the mean waterline of the Red River in Caddo Parish. The section is in both Caddo and Bossier Parishes.

Frustrations are many and varied.  Kathy posts a good point about one category of those frustrations, living with drilling and long term production as a land owner in close proximity.  State regulations and case law support the rights of surface operations as a requisite to producing minerals.  The best way to address those issues is in detailed lease language.  Language not usually contained in standard form leases.  If specific language to address concerns and limitations of surface use are not in the lease, not only will surface owners be disappointed - they will have little if any opportunity to address those frustrations from a legal standpoint.  Get a qualified, experienced O&G attorney to draft an Exhibit page to your lease that covers all the usual beneficial and protective lease language in addition to addressing specific concerns related to surface use.  Most companies will agree to standard language that covers these concerns regardless of the size of the mineral interest being leased.  It's worth a few hundred dollars is that's all you need from an O&G attorney.

Too busy to fish, Kathy.  :-(   Although I'm less familiar with Texas mineral law than I am with Louisiana, I believe it is possible to include limitation but not out right prohibition of surface use in Texas mineral deeds.  Many owners who live on the land but wish to sell their mineral rights can include language to address this situation and protect their quiet enjoyment rights.  Those who reserve minerals when they sell their land could also place limitations on future surface use but should get professional assistance to ensure that they do not devalue their minerals by over restrictive covenants. 

Cool weather would be nice but in my business I have to work when there is interest in minerals and development.  Here in NW LA things have picked up.  Much more so than in E TX.

Frustration! How high does gasoline need to be before interest in drilling comes back?  And how high does gasoline have to be before the price per barrel goes up? Insanity. Everywhere I look, no wells, just insanity!

Sorry, just venting.....


© 2020   Created by Keith Mauck (Site Publisher).   Powered by

Badges  |  Report an Issue  |  Terms of Service