I am being approached by Chesapeak to lease In this section -  they are only offering $900/ acre and 19%  I think this is pretty low.  Am I having too much expectation? 

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I've never heard of a one nineteenth lease.  Do you mean a three sixteenth (18.75%)?  That and the $900/acre bonus is somewhat low but the follow up question is, how many acres do you own?  That goes to your ability to negotiate somewhat better lease terms.  Section 29 is a producing Haynesville unit operated by BPX.  Did you turn down a previous lease offer or just not get an offer to lease?  Since Chesapeake operates the sections/units immediately south and north of 29, this might be a case of the state approving more than one operator.  In that case BPX would continue to operate and report the existing unit well and Chesapeake would drill one or more cross unit lateral wells that include 29 and operate and report those wells.  The lease bonuses and royalty fractions offered in the early years of the play are history and have zero relevance for current lease terms.

According to Chesapeake the BPX lease is no longer valid 

Did Chesapeake say why?  Has there been a "release" of the O&G lease recorded in the public record?  Without a logical explanation, I wouldn't take Chesapeake at their word.  They have a poor track record and relationship with the truth.

The BPX unit well has recent gaps in production and hasn't reported any monthly production in about a year.  BPX may consider the leases in Section 29 expired but that is a question best answered by BPX, not Chesapeake.  Technically the status of the leases in the section depend on the language in the individual leases.

Jackie, it seems you have two tracts in the unit.  13.946 and 0.983 acres.  Although not a large acreage position, substantial compared to many small residential lots in the section.  I don't have any objection to leasing to Chesapeake but I'd get someone qualified to review the lease and I would certainly want more than a three sixteenth royalty.

Thanks Skip.  I will try and get a hold of BPX - but they seem to not respond well.  

Jackie, if you can send an email and make it clear that if there is any interest in a lease, BPX needs to respond with a firm offer ASAP.  Don't let them tie you up waiting for a response.  Engage with the landman offering the Chesapeake lease and make a reasonable counter if he/she is not going to offer a quarter royalty.  For a quarter, I wouldn't push the bonus per acre much.  Good luck.

James, solicitations are not allowed in Main Page discussions.  Posting a phone number or email address is a solicitation.  Please read the website solicitation policy and delete this reply.

Solicitation Policy

If you have a commercial interest, we want GHS to be a place where you can network and build on your efforts. So, we are again making some changes to our solicitation policy.

Last November, the no-solicitation rule was lifted in the county groups; members are now able to freely promote in the county groups without concerns of violating the GHS' solicitation policy. The reason for the change is that it has become evident there is a need for a place where members can promote their minerals or services. The ideal location for this is in the county groups. 

In addition to this we are making another adjustment. As of today, April 25, 2014, we are changing the solicitation/promotion policy with respect to one's profile picture, profile name and profile page.


Promotion CAN take place in the following places

1.  County & Parish Groups (indicated with "County" or "Parish" in its title)

2. On your "My Page."

3. In your profile picture (i.e. you can use a company or business logo)

4. In your profile name you can use a business name (i.e., American Energy, LLC is acceptable, but "I want to buy your minerals" is not.)

Promotion CANNOT take place in the places 

1. Home Page Forum or any group that DOES NOT contain "COUNTY" or "PARISH" in its title. 

GHS still retains the right to delete any post(s) not in its best interest. 

Thank You


I have but one thing to say on this.... DO NOT TRUST CHESAPEAKE!!!

LOL!  I agree Bill but Chesapeake isn't the party making these over the top offers to buy minerals.  There are definitely other issues associated with CHK.

My statement is based on the fact that we happen to have two Wells that are very similar in Production, Percentage and cost of Operation... but one is by Chesapeake and the other by another Company.

We do not receive a large amount of Royalties from either, however our Royalty Checks from Chesapeake are half of the other, supposably due to Production and Transportation Cost. Add to this that several times we did not receive our Checks for several months from Chesapeake... and suffered from late R-1099 forms for our taxes. 

I agree that the offers to purchase are not from them and especially the 'over the top' offers.to buy our Mineral Rights. 

Going to be interesting to keep watching! 

Chesapeake, the pre-bankruptcy version, sold their gathering and treating systems when they got in a cash crunch.  The terms were designed to give Chesapeake the maximum up front cash.  In so doing they accepted onerous terms effecting their royalty recipients and unleased mineral owners.  Guaranteed volumes (MVC) with a penalty for anything less and a guaranteed minimum profit for the buyer.  The courts should have thrown that sale out but we keep electing judges here in Louisiana that are beholden to big business and ignore the rights of the private mineral owners.  We're about to do it again in the Second Circuit Court of Appeals.  That court has made more O&G case law in the last thirteen years than all other appellate courts in the state combined because the second circuit covers NW LA and the Haynesville Shale.

Thank you Skip


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