SHADY LEASE PRACTICES

The Greer #1 serial # 240233 is being drilled, the well pad is in sec 10 the bottom hole is in sec 15. the land owners in sec 10 signed a basic lease with no clauses under the assumption that they would get royalties off the well, they signed a few weeks before the rig was moved in. Now they have found out that they will get no royalties at all, also the drilling pad is 10 ft this is not a typo i said 10 ft from there house, the well bore is less than 300 ft from the house. this goes to show to do your home work and never trust the o&g to do the right thing tim umo

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Permalink Reply by Douglass Marc on October 23, 2009 at 2:53
Hey shalers, I have a question related to this conversation. Let's say I have a plot of land in Shelby county, just over 10 acres (currently unleased), there is one very active well in a unit bordering me on one side, another has just applied and received a permit for a unit on another side, and there are companies currently trying to lease me claiming they want to include me in a completely different unit. So this puts me right in the apex of at least three units, and could possibly even be more. Is there some common "clause" I could request in a lease to avoid a company putting a pad on my land and drilling in every direction but not compensating me adequately? Or, is it even possible that they coul ddo this? Thanks for your ideas. Douglass
Permalink Reply by Douglass Marc on October 23, 2009 at 3:41
Yes but I can see the potential to earn a lot more by allowing them to use surface, while providing compensation for every drill, or perhaps a small percentage of the take for extracting from any unit in which I am not included. Ever heard of such?
Permalink Reply by P.G. on October 23, 2009 at 3:44
Or try to lease it by the month or year for a fee.
Permalink Reply by Randy on October 23, 2009 at 4:51
Douglass, I've heard of people ASKING for that. I haven't heard of anyone actually getting it. What I've heard is people asking 1/10 cent for every mcf that goes through their land that isn't within their unit. However, like I said, that's just landowner rumor talk, I've never seen anyone actually get it.

Insist on a no-surface use clause. If they want to use it for something later, then they will come to you and ask for it, it will be a separate agreement. What the no-surface clause does is denies them the right to build any facilities pursuant to the lease.
Permalink Reply by Douglass Marc on October 23, 2009 at 5:54
Hey I really appreciate the replies. I have already got them to agree to surface damages, so would that alone be sufficient to cover me? Maybe I could ask for rents if they set up a permanent structure. They actually offered to buy my surface and 50% of the mineral rights but their offer was almost offensive.
Permalink Reply by OLYMAN on October 23, 2009 at 6:18
Douglass, what ever you do get a lawyer to review any lease, the o&g is responsible for surface damage to start with so they aernt giving you anything. my lawyer tells me you could get up to 250,000 $ for a well pad on your property. Just remember you only have 10 ac. and a well pad could be up 5 ac. Tim umo
Permalink Reply by Douglass Marc on October 23, 2009 at 6:30
I suppose I need to find a lawyer. Just kind of scary since I don't know too many and the with the common cliche that puts them in the pot with politicians it even scares me more. I have been going back and forth since July, so I have not rushed into this, but have done as much research on my own as my personal time allows. I don't have a lot of extra money laying around but what I have I don't want ot give it all to a lawyer. Any recommendations?
Permalink Reply by OLYMAN on October 23, 2009 at 6:47
most lawyers here in L.A will do it for 3% of lease bonus payed after you get your money
Permalink Reply by insomniacnla on October 23, 2009 at 6:58
You can ask that any surface use on your land be limited to drilling and production ONLY for your unit.

$250,000 for a drill site????


You should get an attorney that specializes in these thing. Even though you don't have the extra money, don't "be penny wise and pound foolish" with your home and your property.
Permalink Reply by Mac Davis on October 23, 2009 at 11:02
Not "a lawyer", you need "an experienced oil and gas lawyer" if you get one.

If you have 10 acres, the potential royalties and problems are worth the lawyer fees. Be SURE to get an agreement ahead of time on what the lawyer will charge you.

I agree you should specify "no surface" use. If they want surface use, they can either negotiate and pay for it later, or describe exactly what surface rights they want to what part of your property. The standard lease tends to give them the right to do almost anything to any and all parts of your property.
Permalink Reply by Douglass Marc on October 25, 2009 at 3:03
Thanks for all the replies. I guess my best bet is to find a lawyer experienced in these things. Any recommendations? Thanks again.
Permalink Reply by Hobbs on October 26, 2009 at 10:10
Douglass, re your request for a lawyer recommendation:

Dougherty Law Firm, Tyler, TX; Tom, Ken or Bob Dougherty. Outstanding - based on personal experience. Go with hourly rate and get estimate of hours up-front, so you know what you're paying for. Recommend never agreeing to % of consideration - other non-cash consideration (such as royalty in a lease negotiation) could be minimized to your detriment and negotiator's benefit. Be blessed!

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