Texas Smackover Lithium Play
As the Smackover (SMK) Lithium (Li) play picks up steam we need to acknowledge that from regulatory and legal standpoints, there will be significant differences between the play in South Arkansas and in East Texas. Very soon we expect to know more about royalty provisions and regulatory guidelines. From past experience with dissimilarities between Texas and Louisiana mineral laws and regulatory statutes governing the Haynesville Shale, we hope to limit confusion and make it easier to access the information that will be pertinent to land and mineral owners.
In order to help members and quests to the website and to avoid confusion, we will start two new discussions, one for Texas and one for Arkansas. There is an abundance of information in the original SMK Lithium discussion threads and members may want to click on them and then save them to their computer bookmarks/favorites to be able to access them in the future as they will eventually rotate off the main page. After 24 hours, comments in those discussions will be closed but the replies will remain available in the website archive. Archived discussions are available by using the search box in the upper right corner of all website pages.
GoHaynesvilleShale.com was one of the first resources for mineral owners to learn basics, share information and generally provide a place where mineral owners could become more informed managers of their mineral assets in the age of the Internet. The website is pleased to continue to provide those services to those who will benefit from the SMK Lithium Play. Please keep in mind two things. You are a key part of the on the ground intelligence network by letting your friends and neighbors know about GoHaynesvilleShale.com and encouraging them to participate in site discussions. And since GoHaynesvilleShale.com is free for all to use, please consider a donation to help keep the website online.
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Replies to This Discussion
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Permalink Reply by Lisa -
Are there companies now offering 12.5%? I knew the Arkansas land owners were requesting at least that— and assumed they would get it.
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Permalink Reply by Lisa
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Do y’all think they’ll eventually switch to percentage royalties? Good signing bonus?
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Permalink Reply by Skip Peel - Mineral Consultant
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There have been reports of lease offers with substantially greater royalties but they are useless without knowing what those royalty fractions are and who offered them. I don't expect a substantial bonus, maybe $100 to $200/acre depending on acreage positions. As with an O&G lease, the real income is in royalty payments. The public record will be no help because lessees will record memorandums of lease as opposed the full lease text.
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Permalink Reply by Lisa
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I shared detailed info, but I guess that was not in keeping with site protocol— and that reasonable and fair. It was deleted.
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Permalink Reply by Skip Peel - Mineral Consultant
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I guess I missed that, Lisa. We have always shared lease bonus and royalty information so that seems strange. Unless there was something else in your reply that was prohibited by site rules, the bonus and royalty shouldn't be a problem.
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Permalink Reply by Lisa
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My cousins and I would like to discuss all this with a knowledgeable O&G attorney. Recommendations?
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Permalink Reply by Lisa
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The new offer is $200/acre bonus (up from $60) and $175/acre/year if it goes into production (up from $40). I think it’s a five-year lease with the option to renegotiate at the end of the five years. The past offer was fifteen years in five year increments, no renegotiation of amounts (I think).
I’ve asked about a percentage royalty and explained that we would be consulting an O&G attorney before we would sign.
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Permalink Reply by Skip Peel - Mineral Consultant
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Thanks. I would characterize that as an opening offer. Something of a fishing expedition as all lessees want cheap lease terms. As more information becomes available those who have waited to lease should benefit from knowing what constitutes a fair market offer.
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Permalink Reply by Lisa
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I’ve heard some complicating issues from a friend who visited with a o&G lawyer. I don’t have all the info yet— but I’m pushing the brakes hard for now.
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Permalink Reply by Lisa
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Also, I realized that I wrongly said as fact that the offer is indirectly from Standard Lithium. I was thinking about it this morning and realized that someone told me something quite a while ago that made me think that the people talking to locals are associated with Standard Lithium.
I don’t know that and shouldn’t have stated it as fact. I’m beginning to doubt it myself.
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