Replies to This Discussion

Permalink Reply by Gypsea on December 1, 2008 at 4:22

Section 10, Township 20N, Range 10W

• ▶ Reply

Permalink Reply by The_Baron on December 1, 2008 at 4:33

$300/acre for cotton valley and up is pretty good. Depends on the royalty offered. Depending on where you are located, the cotton valley might be productive or not. Look to see how many producing wells are around you. If you are not near or in an established field (wildcat), you will want to lease, as the chances for a dry hole are much higher. HAve someone knowlegeble with the geology in your area check your depth restriction before you sign. Avoid a specific depth and refer to the formations involved by the names accepted by DNR. Also include a vertical pugh clause.

• ▶ Reply

Permalink Reply by The_Baron on December 1, 2008 at 6:08

You miss the point KB,

As stated in the intial post, Will-Drill is seeking to drill a cotton valley well, they are willing to exclude the deep rights.

The economics are very different for a CV vs. HA. You can ask for more, and should ask for more.

However, I would be amazed to see a 30% royalty. I would say a royalty of 1/5 is more resonable. I can not bew more presise with out knowing more about the area.

If most of the section is leased, as stated in the initial post, look at those leases. See what royalties they got.

• ▶ Reply

Permalink Reply by Gypsea on December 1, 2008 at 6:27

25% is what the guy calling me is saying

• ▶ Reply

Permalink Reply by The_Baron on December 1, 2008 at 6:33

That is probally as good as you will get on the royalty side. Even maost of the recent shale leases are for 1/4 royalty.

Try not to worry as much on the bonus side, just get a good lease. A good lease with terms you want is better than a high bonus.

You may want to exclude pipelines operations in your lease, get a cost-free royalty, etc.

Consider if want the possibility of surface operations or not. Also if you get your water from a well, consider protections to your water supply should operations lower the level in your aquifer.

• ▶ Reply

Permalink Reply by The_Baron on December 1, 2008 at 6:41

This has nothing to do with the HA. It is for CV rights. You can not use assumptions based on the demand for the HA in this case.

I agree that it doesn't hurt to ask for more (see my above post), but I think this is a good offer for CV rights.

• ▶ Reply

Permalink Reply by The_Baron on December 1, 2008 at 7:37

There is difference between asking questions and making demands.

• ▶ Reply

Permalink Reply by The_Baron on December 1, 2008 at 8:25

If you are overly aggressive or demanding you will get nowhere. Be nice. Be civil. You reap what you sow.

• ▶ Reply

Permalink Reply by The_Baron on December 1, 2008 at 8:48

Its not fine.

If they are rude and aggressive show them the door.

Permalink Reply by Gypsea on December 1, 2008 at 8:36

Tom James out of Ruston is who has been calling.

• ▶ Reply