Replies to This Discussion

Permalink Reply by Snake Stewart on November 24, 2008 at 13:50

At $1500 an acre bonus and $6mcf, I dont want them anywhere near my place!

If I cant win , I certainly dont give a hoot if you guy's win or not. Matter of fact, I kinda hope you lose if I do.Nothing personal, just a matter of principle to me. This isnt about fair anymore. The fair left town 3 weeks ago and wont be back till next October. We see with opened eyes what lies ahead for the mineral owners. The O&G' have shown that fairness is more a condition of the skin, sometimes refered to as complexion, instead of their business practices. Doesnt matter how many infomercials or billboards or even Shale Expos they put on. P.R. aint what it used to be.

I ran the numbers back 6 months or so ago and fully understand the magnitude of this play.This is for all the marbles.The economy is in the tank and this may be our only shot at even surviving long term.

We learned early on that middle men were flippers and stood between us and the most profit that we could make.Now we know that the biggest flipper out there is the "Largest Producer of N/G " and a signed lease means absolutely nothing to them depending on which way the wind blows. That my friend cant be explained away. At least to this country boy anyway. Now I just feel like a redneck in a bar room full of yuppies! I am just gonna back up in the corner of the room and watch the door.

The O&G's brought about this part of the play on themselves. The lieing and backstabbing will just make it harder on everyone further on down the road because you and me and most everyone else with a clue, know this thing is far from over.

P.S. I have already won. This is just frosting on the cake so to speak. I have done quite well by the grace of God and will continue as such as long as he sees fit.These are my minerals tho and if they dont want to pay me what they are worth then just leave them be. They arent hurting a thing where they sit and will actually gain in value the longer they sit. Aint life grand ? Have a good one Baron. I certainly dont agree with your view but do enjoy your posting. Helps prepare me for when the boogie man comes knocking.(LOL)

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Permalink Reply by Snake Stewart on November 24, 2008 at 14:42

Thanks KB, I was going to add....." and smack anybody that comes up trying to put a quarter in the juke box", but felt it was a bit over the top. What do you think ? (chuckle,chuckle)

Permalink Reply by BirdDawg, plain ole' idiot on November 24, 2008 at 14:56

Dang,
didn't know we were Mc Mc ing on this thread too.

Permalink Reply by shelby on November 25, 2008 at 3:53

Snake,
Thanks for the input; it's a tough decision regarding going leased at lower bonus or going non-consent with a bigger share of the pie. One thing I do know, is that it takes alot of effort to stay up with the oil and gas companies once things start moving. One has to factor staying sane throughout the whole process, as reading Louisiana Mineral code 1st thing in the morning, is just no fun, and starts the day out all wrong.
Talk to you later,
Shelby

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Permalink Reply by Snake Stewart on November 25, 2008 at 4:06

I have the upper hand on you Shelby, I wasnt sane when I got up this morning so I dont have as much too lose.(LOL)
Have a good one!

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Permalink Reply by Les Bamburg on November 24, 2008 at 4:40

Baron, my opinion is an unleased mineral owner (carried working interest owner) has all the same protections whether he consents or non-consents. There is really no reason for a carried working interest owner to consent and take on risk unless they intended to market their share of gas production.

A minor point, costs are deducted from revenue (production) rather than royalty. Royalty is only associated with lease agreements.

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Permalink Reply by The_Baron on November 24, 2008 at 5:28

Your right about costs being deducted from revenue. I just got to a typing!

But KB has pointed out that the mineral code is vague about what protections a non-consent gets. I would feel better about having somting on paper.

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Permalink Reply by Grice on November 23, 2008 at 22:50

In an effort to support Mr. McGhee's post, I will take a different approach, and submit the following;

To help answer the question, lets revisit a little history of Louisiana. Back when drilling first began in Louisiana ( late 1800's), there were no regulations in place. If a well was unsuccessful, the driller simply moved to a new location and began drilling again. This was not a major concern, as most of the land was swamp, and there were only a small quantity of drillers working in this territory.

Many of those early wells would produce a "smelly gas", but no one knew the importance of that gas. In the early 1900's, it was discovered that the "smelly gas" was burnable, and could be used in a productive manner. While this increased its value, gas continued to seen as burden, since oil was the focus of many drilling. Shortly after, the first well began producing oil. While it was small in quantity, it did establish the presence of oil under Louisiana soil. That discover of oil lead to a overwhelming increase in activity.

By the early 1940's concerns of the popularity of oil wells became so great, that Louisiana established a set of laws to regulate the drilling. Those original laws were poorly written, and did little to ease any of those concerns. In the 1950's, a more define law was created, which addressed those remaining concerns. That new law created a means to which Louisiana could allow drilling to continue, but in a way that did not place a burden on the land. Many of those original laws were written out of what was being done to the land at that time. Over the following years, certain laws were withdrawn, other were amended, and some new laws were added.

One of those laws, which relates to the question asked, made it a requirement to form a "unit". Those "units" established a parameter for drilling, and determined who would be allowed to drill within that parameter. Instead of drillers ravaging the land, the drillers has to get "permission" before they could drill. When a driller wanted to drill on Louisiana soil, they were required to notify the state as to where the well would be placed, and who will be the person doing the work. The creation of a "unit" also regulated the extraction of the oil from beneath the soil.

By understanding what a "unit" is, we can better understand what "unitization" is. The "unitization" is the grouping of two or more "units", at the request by the driller, to establish a parameter of the operations, regulate the extraction of the resource (oil, gas, etc.), determine who will be doing the drilling and set the means for compensation.

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Permalink Reply by pilgrim on November 24, 2008 at 6:40

Thanks for the help- We now have a much better understanding of our situation.

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