Panola County -

We are being encouraged to sign a Production Sharing Agreement by Anadarko that will effect our minerals in Panola County in order to drill a Horizontal Haynseville Shale Well (these minerals have been HBP since the 40's with a 1/8 royalty and we do not want to reduce our revenue in a future well by increasing in unit size).  Does anyone have any information, suggestions or history regarding these instruments?

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C Willi -- if they need your written approval then I would handle it like a maybe new lease and request more Royalty at least. Since you are in Texas-- post this in Ben Elmore's  group on Texas Mineral Law--- he is a nice Oil & Gas Attorney that has donated his time to help people on this site--that can answer the question and tell you if maybe you can renegotiate the terms.

I had to make a decision about a PSA a few months ago.  This was AFTER the company had purchased right of way and prepared two pits, pad and road. 

Yes  see O&G guy or post to Elmore's group..  he savvy in general.

One of the points made to me is that it would mean more wells in unit (would combine 630 acre unit with a 512 acre unit).  And it broke down the distribution. 

Thing is..still no drilling on the acres.  So a percentage of zero is still zero isn't it?

even if you can not get any better terms and diluted --- more production better than nothing.

Thanks for the replies - I'll post to those groups and see if anything comes of it.  I agree more production is better than nothing, but if this is an opportunity to increase the royalty (even a little) I don't want to miss it.

Thanks again

C. Willis--- How many net acres you have in unit HBP?

126 net acres.

c. willis --- that enough a good shale well will make it worth talking to attorney about if they say no to any renegotiations. Ask first the operator for better terms if possible and if they say no then Call a good attorney if you know one or if Ben thinks he can help you --he is in Texas if you don't already have some one. Let us know how it works out--- a nice shale well would be nice and since you are HBP it's the only chance in your live time probably to get a shale well. I would not pass it up..... just IMO look at some numbers---126/1146=0.11033 X 1/8= 0.0137916 decimal interest---  if avg shale well makes 6 Bcf total over 20 years with avg gas next 20 years at $5 = 30,000,000X 0.0137916= $413,748 for one well :)---- you moneys in the ground and this maybe live time deal to get to the shale.... Go for it and it doesnot hurt to ASK for better R--- would not push for Bonus--- maybe put time limit on it say like a lease 3 years.---- I also assume this would not change your shallow well unit size therefore not dilute it-- clarify with operator in writting

Yeah I agree with everything you're saying, absolutely.  I'll keep this thread up to date with our dealings.  Yes the wording states expressly operations above the base of the cotton valley are unaffected.

C--- APC is a 33B$ Co. they know what they are doing with experience drilling and they have the money to drill it-- so great deal for you with the type of operator you want--- if it's good (the Shale) and with you having 126 net acres they will need you to drill a H shale well--- Are you 126 undivided are tied to a tract of 126 acres? Any H shale wells offsetting your unit? You in good shape but don't be so hard they you run them off--- you want them to drill -- too costly to attempt ULMO or be JV in well unless you have 2-3 million in bank not doing anything--Ha Ha  Who is operator of your shallow wells? Did APC buy the deep rights?

Anadarko owns the rights to everything.  it is a 8/8 interest in a 126 acre tract.  We do not want to run anyone off and want them to drill even if nothing can be done (and that may be just the case we are dealing with), but we don't want to miss the opportunity if this is a 'window' for us to increase our pesky 12% royalty.

C--- I would be like you --- Happy let the drilling begin--- :)) --- Wish I had some minerals there>>>> Congratulation--- Don't know your age but make sure you educate any children or young future heirs and not let some "snake steal them with a check in mail"  I am sure you have seen several in your mail box thru the years. Many way to do this with Trust in wills etc. I am sure I am preaching to Choir and you already know this but to reader of thread they may be educated. Hope they drills the unit out completely one day for you and your family. Enjoy-- but don't going spending it until money in bank each month .

C-- If confined to a 126 acre tract they could then cut you out if they have problems with you. If undivided they could not drill a H wells without it--- but I doubt that would happen APC good people--- but let Ben verify that with you. Just looking at all bases I am aware of-- I not attorney.

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