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Permalink Reply by Les Bamburg on January 14, 2011 at 8:05

You are being strong-armed by a seismic company.  Without seismic data in your area a company may deem the prospect too risky to drill - depending on the geologic nature of the prospect. 

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Permalink Reply by Robby Smith on January 14, 2011 at 8:15

Thanks for the post.  I had a feelling something was up. I have contacted the office, yet to hear back from them. 

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Permalink Reply by Robby Smith on January 14, 2011 at 9:04

The company rep contacted me finally. He is coming by with the letter of permision for me to sign. He still states that if we don't sign, and production begins, devon energy will not pay me.

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Permalink Reply by Mac Davis on January 14, 2011 at 15:08

If he said that, he is lying.  Talk to him, draw him out on what he means by "devon energy won't pay." Make careful notes about what he says.  Maybe even record what he says.  In Louisiana, you don't have to have the other party's permission to record a conversation that you are a part of. 

 

Payment for minerals won't have anything to do with whether you sign a seismic agreement.    However, signing the agreement may make it more likely they'll drill your area. 

 

He could be lying by telling you half truths and misleading you.   If you don't sign the seismic contract, and someone does begin drilling anyway, they won't pay you the $15 per acre for the seismic fee later.  It won't affect payments for minerals if they do drill a well.

 

How many acres do you have?  Is it vacant land, your home, or what?  Do you know your township, section and range is, or can you give a better idea where the property is?  There are already some big wells north of Ruston.

 

In all of your dealings with this company, be sure to keep in mind that he's already lied to you.

 

I'd read very carefully what the seismic agreement says.  Make sure there are no gotchas in the contract.  I'd probably reject the contract if they say anything other than "company xyz can do a survey."  Remember, you can strike out any clauses from the contract you don't like before you sign it.  Be sure it doesn't give them exclusive rights to do a survey.  Consider any damage they may do, for example cutting down trees, clearing a path, driving big trucks across your land, etc.  They may also want to dig holes and set off explosives.

 

I'd be sure to specify a short period of time in which they can do the survey, etc.  I'd also require it to specify anything about clearing a path, running a cable, digging holes, using explosives, drive trucks across your land, etc. if those things mean anything to you.

 

Of course, they don't have to sign if they don't like the changes you make to the contract.

 

Don't sign the agreement until he hands you a valid signed check on the spot.  Be sure it's a real check, not a bank draft or some other such "phony check."  For some of these guys, I'd want cash plus two forms of ID, and I'd examine the bills real closely to see they aren't counterfeit.  A seismic company got a lot of people in my area to sign seismic agreements, obligating the landowners, but several months later, they cancelled the agreement and never paid anyone.

 

Have you signed a mineral lease already?  These leases may grant the leasing company exclusive rights to do seismic surveys on your land.  You may not have the right to let them do a seismic survey.  If you haven't signed a lease, you may hurt your chances of leasing or the value if you've given another company exclusive rights to do seismic surveys.

 

Remember, you're not doing it for the payments for the survey,  you're doing it to make it more likely they drill in your area.  Unless you've got a large piece of land, they probably won't refuse to drill just because one landowner didn't allow a survey.

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Permalink Reply by JHH on January 15, 2011 at 15:25

Very good information!  Is $15-$25 per acre average for these kinds of surveys?  Is this typically done in areas that have proven natural gas well results or are they looking for new oil pockets at shallow and deep levels? thanks, jhh

 

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Permalink Reply by Joe Aldridge on January 16, 2011 at 2:01

Its done in both cases. It will show new areas to drill in and it can be used to define existing structures better by finding "cut off" traps that would not drain with the primary structure. I saw the AMOCO 3-D seismic of the Port Hudson Tuscaloosa field. It was already in production when they did the survey. It looked like a "fire ant hill". The structure was that pronounced. They identified several "cut off" traps from that survey and did additional drilling.

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Permalink Reply by Mac Davis on January 17, 2011 at 0:06

A number of small property owners have reported prices around that range.  I don't know if someone with larger chunks of land and more knowledge gets better prices or not.  i.e. I don't know if you are likely to be able to negotiate.  Some people have gotten offers, or even signed offers and then had the seismic company back out.  

 

Some of these surveys are done by independent companies who do the surveys and then sell the data to anyone willing to pay for it.  They may be trying to find the exact boundaries of a known good gas field, or hoping to find something nobody knows about.  Or it may be for someone who's actually doing drilling in the area.  

 

I still think the reason you want to allow a survey is to increase your chances for big royalty payouts or lease bonuses, not for the money they'll pay you for the survey. 

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Permalink Reply by JHH on January 17, 2011 at 1:57

Thanks.  Again, more good information.  Hoping for something nobody knows about. rumors of oil below the haynesville persist... but just rumors.

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Permalink Reply by Joe Aldridge on January 14, 2011 at 13:48

Robby,

Yes, you are being strong-armed. The seismic shoot has nothing to do with your royalty or any production in the future from your property. It will show the company that the formation is there or not there. You don't say what size property you have. If its a large property, a hundred acres or more, and you won't sign then the data may not be accurate for the survey in your area. That would be the only reason that the company would be pushing you. At least that is my opinion.

 

For your info. We were in a CHK 3-D survey in 1995 and if my memory in correct they paid $25.00 per acre. Also, you can request a print of the seismic from your property. You should put that in the agreement before you sign. Good luck and I hope you get a good lease and a good well.

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Permalink Reply by benny688 on January 14, 2011 at 14:08

I'm in Texas, but here, a short term lease or payment for seismic testing is between the seismic company and the owners of the surface rights.  It is completely separate and has no strings attatched to an anticipated lease for the holders of the mineral rights.

 

If you own the surface, but not the minerals, the mineral holders may try to force you into this, but there is no logical reason not to allow seismic testing and take the small fee to help pay the property taxes.

 

I have several leases with Devon and this doesn't seem like the way they normally do business, but this is kind of like putting the cart before the horse.

 

I guess the short way of explaining this is that a seismic testing company has no control over your mineral rights.

 

GLTA

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Permalink Reply by P L Campbell on January 19, 2011 at 6:55

Tell them you want $25.00 an acre.

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Permalink Reply by Tom Hough on January 19, 2011 at 6:56

You are dealing with a lying son of a b---h. You do need to go ahead and let them do the survey though. Give them the ultimatum though that you want an additional $10/acre as an upfront payment for damages.

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