Replies to This Discussion

Permalink Reply by Joe Aldridge on June 30, 2011 at 2:55

What was his initial offer?

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Permalink Reply by william h mcgrath on June 30, 2011 at 3:03

$1,500 per acre

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Permalink Reply by Spring Branch,mineral owner on June 30, 2011 at 3:08

What survey is it in?

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Permalink Reply by Henry on June 30, 2011 at 3:17

Bill,

I won't advise on how much money to get.  But I will strongly urge you to think about the terms of your lease, as much as the bonus.  Many people on this site regret signing the so-called "standard lease."  The standard lease of most companies allows the operator complete access to your land, access to all depths for drilling, and the right to deduct from your royalties expenses for things such as marketing, treatment, compression, etc.  I would suggest that you enlist an attorney with experience in Haynesville leasing, and ask him to give you a lease addendum to the standard lease that, as a minimum, contains:

- horizontal and vertical Pugh clauses

- no-surface access clause, or a clause that says they have no right to the surface, but you will not withhold access unreasonably (i.e., they must pay you if they want to put a well, pipeline, or road on your land)

-  cost-free royalty

- provisions for clean-up, P&A, and filing a release at the end of the lease

- damage and indemnity provisions

- penalties for late payments

Others on this site may suggest other items to include in your lease.  Remember, you will get only one chance to lease, so you need to get it right the first time.  With the money you'll get for 152 acres, you should definitely invest $500 -$1000 in the O&G attorney.

I recommend you negotiate the bonus, royalty, and all terms of the lease at the same time.  JMHO.

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Permalink Reply by william h mcgrath on June 30, 2011 at 3:22

I agree and have asked my attorney to review the lease.  He has made all the changes and I have submitted them to the broker.  The only unknown I have is the signing bonus and what is the fair market price for the signing bonus.

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Permalink Reply by JWC on June 30, 2011 at 3:39

William can you share your survey name?  If not we understand.

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Permalink Reply by william h mcgrath on June 30, 2011 at 3:56

Edmund Quirk A-35

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Permalink Reply by Ben Elmore on June 30, 2011 at 4:24

I suggest you contact other companies in the area to see if anyone else is interested in leasing your interest.  You do not always have to go with the first one out of the box.  Check recent drilling permits in the area to see who is active.  In my experience, if you only have the one company making an offer, your only leverage on getting them to go higher on the bonus is the level of their desire.  Do you know how much acreage they have leased around you?  Are they the only ones leasing around you?  If so, then they create the market.  By contacting other companies, you can hopefully change the market to your favor. 

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Permalink Reply by Spring Branch,mineral owner on June 30, 2011 at 5:11

XTO is active on the northern border of E. Quirk, A-35, but by far the most active Operator in E. Quirk is S.M. Energy.

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Permalink Reply by ken christian on June 30, 2011 at 12:08

What company are you negotiating with?  Thanks.

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Permalink Reply by william h mcgrath on July 1, 2011 at 0:44

I have worked with the company before on smaller projects.

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Permalink Reply by Joe Aldridge on July 1, 2011 at 1:03

William,

Back to your original question about the bonus................ This is what I tell everybody that calls me and asks that question. Acceptance of a bonus is a personal matter. I don't know what your situation is either personally or financially. So I can't or don't tell anyone to accept or not. If the $1,500 an acre makes you happy then accept it and move on. If not then hold out for more and hope they come back at some point and lease. I'm sure you understand holding out is a gamble. If you lease with this company it looks like you may be in the area where a well is going to be drilled. I think that is the purpose of this to begin with. But you have to be comfortable and knowable enough about the geology to want a well rather than a higher bonus. Personally, I want enough bonus so that if a company sits on me and just holds my lease then I've got something in the bank. I hope this helps.

 

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