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Permalink Reply by Steve P on March 27, 2018 at 9:33

Cara:  GEP co-operates 2 HA unit wells i have land in that are a few miles west of Pleasant Hill in Sabine Parish.  GEP and Vine O&G operate the wells that they bought that were originally drilled by SWEPI and Encana.  I've had no issues with GEP, which is more than I can say about other operators in the HA area.

Others on this site would have to speak to lease terms.  You might need to be much more specific as to the location of your land other than "Old Pleasant Hill Hwy."

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Permalink Reply by Dion Warr, CPL on March 27, 2018 at 13:00

To Steve's point - Cara, if you can share section, township and range, that helps any interested folks on the site that may wish to assist; it provides an easier way to locate your property.

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Permalink Reply by Cara Leggett on March 28, 2018 at 2:51

Thanks, Steve and Dion. Property is located at S19, T8N, R12W, Sabine Parish. I have been offered $700 per acre, royalty of 1/5th, for 3 years with 2 year option to renew at same price, paid up Oil and Gas Lease.  I also received a lease which contains language that seems deliberately confusing and seems to give GEP lots of control over my property. Since I only have 5 acres, it seems the amount of money I would receive if I agree to the current terms would hardly be enough for me to afford a lawyer consultation over  the lease, to insure the legal protection of my property, and the increase in the amount of my income tax contribution on state and federal levels. I have no idea what 20% royalty would mean................................

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Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2018 at 4:03

Cara, you are correct that the $700 per acre for 5 acres is not a lot of money however I would like to point out that it is much more than the services of an experienced O&G attorney would cost to look over the lease and add an exhibit with language beneficial and protective of your interests.  In general the bonus and royalty fraction are "in the ball park".  I have received no complaints concerning GEP Haynesville so I would defer to Steve Ps opinion of the company.

Please keep in mind that attorneys that specialize in O&G law and representing land owners are few and far between.  And that many attorneys will claim some level of expertise on the subject.  If an attorney doesn't list O&G as a core practice on their website, they probably are not highly experienced in legal issues that can crop up for mineral lessors.  Get the best you can find regardless of location.  The difference in cost is small.

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Permalink Reply by Cara Leggett on March 28, 2018 at 10:29

Thank you, Skip. I am definitely going to contact a lawyer. I made inquiries this afternoon and should hear something back fairly soon since I have to commit by April 6. I appreciate your advice! 

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Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2018 at 10:32

You're welcome, Cara.  Not just any lawyer will do.  You need an experienced O&G attorney.  As I mentioned, a quick look at their website should provide you with the needed information.

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Permalink Reply by Cara Leggett on March 28, 2018 at 10:56

I'm a member of Legal Shield. They have a large group of attorneys on retainer, and I requested an oil and gas specialist for lessors. Once I get an attorney assigned, I will research to confirm expertise-because you told me it is important. ; )

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Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2018 at 11:15

Not familiar with legal shield.  Be forewarned that Louisiana legal laws are unique.  No matter how "experienced" a lawyer may be in O&G law, if they are not intimately familiar with Louisiana codes and case law they are not qualified to provide opinions or craft language for your O&G lease.

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Permalink Reply by Cara Leggett on March 28, 2018 at 11:31

Got it. I will be cautious. My area contacts with Legal Shield are in Alexandria, so if they have an oil and gas specialist for lessors they should be aware of Louisiana's peculiarities. But, I will research whomever they recommend. Do you have a recommendation for a good, lessor O&G attorney? I can afford to spend $3,500.

Permalink Reply by Brian Tannehill on March 28, 2018 at 3:55

Cara, you can't afford NOT to hire a lawyer. You will be much better off in the long run.

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Permalink Reply by Steve P on March 28, 2018 at 8:30

your property is about 10 miles SW of mine.  My property has had two wells drilled, both pretty good wells.  The second one is a very nice producing well that has a very slow decline in production after almost 2 years.  I have a lease from 10 years ago, and I have 25% royalty, with an addendum that addresses deductions for production, processing and transmission costs.

I've not looked at wells as far south as your land, so I have no idea what the prospects are.  The fact that GEP is trying to lease it rather than some broker looking to flip it is an excellent sign. 

How you proceed is dependent, to some degree, on how you look at financial matters in general.  You could try and negotiate the $700 up to something better, maybe $1000, and skip the attorney, put that money in your pocket and do something fun with it.  If GEP drills a successful Haynesville well, your royalty checks will be far more in a year than the $3500 lease bonus, and then you will kick yourself for not having spent the bonus, or at least a good part of it, on an attorney who would have included an Addendum that addresses all those details that you likely don't know about yourself.

Another alternative, not one I'm recommending, is that you go to the Sabine Clerk of Court office, and have someone find a lease from one of the larger landowners in your area and copy their addendum and try to get that included in your lease.  Don't pick a owner that has thousands of acres - you don't have their negotiating power, but someone who likely did seek out legal assistance for their lease.  

This exercise will cost you almost nothing.  You still won't know if the lease bonus or per cent royalty is a "good deal" or a "bad deal" but you will be in a somewhat better position than you are now.

  

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Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2018 at 10:30

Owing to the Louisiana legislature doing the bidding of the O&G industry, it is extremely rare to find a lease recorded in the public record after about 2010.  Maybe earlier, Dion might know the actual date. Companies have the right to file a Memorandum of O&G Lease which provides only a legal description of the lands leased, the effective date and the primary term of the lease.  The actual lease form and any addendum may be found only with the lessee and/or the lessor.

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