landowner

One Time payments for Salt Water Disposal Wells are a bad deal

After having been offered a one time, upfront payment of $50,000 for a SWD well to be placed on my property, I decided to find out as much as possible about what the going rate is. I did find that right over in East Texas the going rate is .05 cents per barrel, 10 % of oil sales and surface damage. So, in other words, $50,000 might get them started. IMO the one time offer is the equivalent of the early, cheap leases that people signed. A SWD is a great asset for the O&G company and it is a permanant thing for the landowner.

Tags: Disposal, Salt, Water, Wells

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landownerPermalink Reply by Missy on December 15, 2009 at 17:54
According to the SW hauler in East Texas, the 10% on oil sales is standard there. I don't know if that is something that is addressed in an original lease or not. (The sale of the oil from the water) If deals were made for per barrel, % of oil sold and surface damage, the initial offer of $50,000 would be 'a drop in the bucket'.
Permalink Reply by S.H.M. on December 16, 2009 at 5:40
Missy, where are you located? These "extra potentials" beyond bonus/lease/royalites interest me greatly.

landownerPermalink Reply by Missy on December 16, 2009 at 5:56
Bienville Parish. T 15N R9W

landownerPermalink Reply by Missy on December 17, 2009 at 16:17
I hope I haven't offended anyone, it was not my intention. I just wanted to let people know what kind of deals our East Texas neighbors get and find out why we don't receive the same here in LA.

landownerPermalink Reply by Missy on January 27, 2010 at 14:54
I have read my lease many, many times. It does contain that language, however, I do have the surface clause, and they have moved on. The salt water contains oil, which the Co. sells. IMO this is why they have the right to dispose of the saltwater and are not required to pay landowner for that. Also, my lease has been reviewed by a very capable O&G attorney, and apparently they DO NOT have the right to drill a SWD well without my permission. So I guess it is fair to say, the clause referred to, does not give them the right to drill a SWD well.

landownerPermalink Reply by Missy on January 27, 2010 at 14:21
My lease was the standard lease except that there is a surface clause. The company is required to pay additional compensation for surface use. I don't believe their right to dispose of saltwater gives them the right to drill a well to do so on my property. I think that refers to their right to haul it away. If they already have the right, why would they offer me $50,000 to locate the well on property they already have the rights to?

landownerPermalink Reply by Bobi Carr ("parker") on January 27, 2010 at 19:19
Missy,

Even though they have the right to do so does not mean that they would not also pay a "use fee" for exercising their right.

landownerPermalink Reply by Bobi Carr ("parker") on January 27, 2010 at 19:23
Missy,

Have they said whether it is a disposal wells for saltwater from your unit, or a commercial disposal well?

landownerPermalink Reply by Missy on January 28, 2010 at 3:51
They said it was for any units that they had interest in, and something about other entities. I don't remember exactly.

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