Selling Working interest?? I don't believe it.

I have commented prior to now, but I wanted to ask again. my family owns property in the "CORE" area of the Haynesville-- Township 14N Range 12W. In most of the 7 sections we own property, we have waited for a well to pay for itself, then we are paid. For example, in one section they have drilled 8 wells, we have 55 acres in that section, and 4 of them have "paid-out,' so we receive a check for 8.5% of the profit per well, per month.  ANyway, my question is of a different subject matter. We also participate, that is we have partnered with Chesapeake in another section, we have/had 200 acres in one section, we leased half (100) and the other (100) we paid our share of the cost of the well. we also had a "Turnkey" agreement, meaning that in the case of a cost over-run we would only be responsible for a certain amount, so that LLC is listed as a production company, A company out of Houston represented us, and finalized the terms of the agreement, the theory is/was that we are forming "PUD's" ( proven reserves) underground that a seller could continue drilling where we left off. As one member of the family, I didn't think it was a good idea because I anticipated the GARGANTUAN supplies of natural gas that the Haynesville, and other plays were producing. Our deal was for 1 well in 3 different sections, so 3 total. In conclusion, we are now being told that 3 is not enough!! I, myself, am ready to locate a seller. I agreed to "go Along" with this deal and participate, now I am growing discouraged as I had the foresight to realize a seller would NOT buy our reserves. Other members of the family, (and their are just 2),  IMO are too proud to admit that I was right and they were wrong. Their "pride" and greed made them believe it would have been possible to drill And establish these so-called reserves, ANY THOUGHTS? I would be eternally grateful, Please offer suggestions/recommendations, or any questions,

Sincerely, Thomas

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Permalink Reply by dominator on March 27, 2014 at 11:37

really?, well OK then, do you know the best method to use to locate a buyer? I don't like this houston group, but I hope the other 2 members "Cling" to him, like they will, and we shall see if it spells m-i-s-t-a-k-e.

Permalink Reply by dominator on March 27, 2014 at 11:40

I just know I'm ready, one family member said do have another well on schedule to be drilled next year, I want out way before then, its just that if this group in houstonj is so good , then why haven't they already sent us a list of buyers?!~~~~~~~~~~~~~

1kw6x71km1v37Permalink Reply by 1kw6x71km1v37 on March 27, 2014 at 15:50

dominator,

Any one of your group who believes they should participate in more wells on that acreage is delusional. The people in Houston are pumps. Don't be dupes

Joe,

I think if the pumps above had the upper hand, they'd just drill and bill those other wells, no need for signatures. But they don't have those, hence the pump action.

Insofar as the first three wells dominator and his people are already signed up for, at this point they should seek solid legal advice about their real obligations and the cost of getting out.

I still say if dominator exchanges undivided interests with cousin susie, they each have abandoned their own property interests for others of equal value. That's not the same as dropping leaseholds, but it will probably be the legal equivalent. I fail  to see how state law would not allow fee owners the same privilege to escape participation as lesees. They need to hear this from an O&G attorney, not a pontificator on an internet message board. But it may provide a way out for the first three wells, if that is desirable.

Permalink Reply by dominator on March 28, 2014 at 7:10

Thank you so much for your response Cheap Shot, what is a pump? I read the first sentence of your post and I am already aggravated, big time, I knew I was right abouty this group in hoiston and explain what you meant, again, what is a pump?

Permalink Reply by dominator on March 28, 2014 at 7:20

I have talked to attorneys Cheap shot, but I feel they aren't telling me everything I need to know. Therefore, I need your help. explain again -please, about "PUMPs" what is a pump?

Permalink Reply by Joe Aldridge on March 28, 2014 at 4:36

Talk to an O&G Attorney. He may have people that may be interested. Or at the least he would be able to send you in the right direction to someone that would market it for you.

Permalink Reply by dominator on March 28, 2014 at 7:29

what does pump action mean?

Permalink Reply by Joe Aldridge on March 28, 2014 at 8:51

I think he is referring to the activities of a promoter. They try to "pump" everything out of a mullet that they can. 

1kw6x71km1v37Permalink Reply by 1kw6x71km1v37 on March 28, 2014 at 8:55

Pump = get  you all excited about the questionable prospects of multiple wells and get your John Henry on an Authorization for Expenditure.

That means you got the money and they will spend it for you.

When they're done  fleecing you, you will most likely own part of a rathole, and that's about it.

Permalink Reply by dominator on March 28, 2014 at 9:56

yes they were paid very handsomely, for "negotiating" the deal with chesapeake, and then no news on prospective buyers, when they fail to perform the duties of selling our interest I will be outraged, and at that moment, I am departing on my own. this ordeal has the potential to get very ugly.

Permalink Reply by Two Dogs, Pirate on March 28, 2014 at 10:30

Dom be careful you could be dancing with the devil.

Permalink Reply by dominator on March 28, 2014 at 10:36

yes sir, you got that right.

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