Update on please help discussion. Another Shelby county post
Hi...I posted about the landman who came to Missouri to see us over the weekend, (unbeknowngst to us).
My husband just got thru meeting with him. He seems nice. Honest. And like he's shooting straight with us. (The last landman told me his boss told him to get the executor to sign the lease without me having a say in it! And other lowdown dirty tactics).
First off, he said this is not Haynesville. I asked my husband how far they are drilling, he said 18,000 ft. I thought that was Haynesville. My husband said, well it's not PROVEN Haynesville. This is a vertical well, not a horizontal.
Also he said the production costs are a lot higher then the Barnett Shale because in the Barnett, the gas there is a pure gas. This gas here has other gases in it that have to be removed. Like three other things he named off, making it more costly.
In the contract he said he's already got it approved for it to be cost free.
He's working on the bonus. My husband said the landman said, they were in fact signing people up and he showed him a 25, 000k bonus that was back in the past when the economy was good. Even went as hight as 30k. He said that was Cpk doing that and they just about put themselves and all the other companies out of buisness doing that.
He was also talking about another guy who was cut out of the deal. They were on the corner and they refused to talk to the landman and so they just cut their block out of it all together. Do you have to be on the corner for that to happen? This guy was on the edge of their " table". I feel for him.
Anyway, because of the extra expense in production costs, and the cost of gas being so low, they don't offer those bonuses here. Well, we've all known that. But just trying to get the most decent offer we can get.
They all learned from the Barnett Shale not to get involved in bidding wars. He said Devon doesn't have any competition where our minerals are anyway in Shelby county, Tx. They've got it all. He was showing my husband maps and charts.
My husband told the landman he saw some bonuses in Shelby county in Dec. for 5k an acre. The landman did verify that he signed people up for that back then. The area this is in is called Pay Day in Shelby County.
So...now we're just trying to decide what to do. Oh also, he said he believes in order for us to be a working interest, we have to put money in to it. That's not the side that he actually works so he doens't know for sure. That doesn't sound right to me. I've always read on here that you just get paid revenues after they pay off the well and royalties and production and transportation expeneses.
He just called my husband on the cell phone and said, he didn't want us to think that they were going to suspend us if we didn't sign. That that's not what they're going to do. (now I really think he's reading my posts!)
Anyone have any input here? Again, thanks for reading.
My husband just got thru meeting with him. He seems nice. Honest. And like he's shooting straight with us. (The last landman told me his boss told him to get the executor to sign the lease without me having a say in it! And other lowdown dirty tactics).
First off, he said this is not Haynesville. I asked my husband how far they are drilling, he said 18,000 ft. I thought that was Haynesville. My husband said, well it's not PROVEN Haynesville. This is a vertical well, not a horizontal.
Also he said the production costs are a lot higher then the Barnett Shale because in the Barnett, the gas there is a pure gas. This gas here has other gases in it that have to be removed. Like three other things he named off, making it more costly.
In the contract he said he's already got it approved for it to be cost free.
He's working on the bonus. My husband said the landman said, they were in fact signing people up and he showed him a 25, 000k bonus that was back in the past when the economy was good. Even went as hight as 30k. He said that was Cpk doing that and they just about put themselves and all the other companies out of buisness doing that.
He was also talking about another guy who was cut out of the deal. They were on the corner and they refused to talk to the landman and so they just cut their block out of it all together. Do you have to be on the corner for that to happen? This guy was on the edge of their " table". I feel for him.
Anyway, because of the extra expense in production costs, and the cost of gas being so low, they don't offer those bonuses here. Well, we've all known that. But just trying to get the most decent offer we can get.
They all learned from the Barnett Shale not to get involved in bidding wars. He said Devon doesn't have any competition where our minerals are anyway in Shelby county, Tx. They've got it all. He was showing my husband maps and charts.
My husband told the landman he saw some bonuses in Shelby county in Dec. for 5k an acre. The landman did verify that he signed people up for that back then. The area this is in is called Pay Day in Shelby County.
So...now we're just trying to decide what to do. Oh also, he said he believes in order for us to be a working interest, we have to put money in to it. That's not the side that he actually works so he doens't know for sure. That doesn't sound right to me. I've always read on here that you just get paid revenues after they pay off the well and royalties and production and transportation expeneses.
He just called my husband on the cell phone and said, he didn't want us to think that they were going to suspend us if we didn't sign. That that's not what they're going to do. (now I really think he's reading my posts!)
Anyone have any input here? Again, thanks for reading.
Views: 143
Replies to This Discussion
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Permalink Reply by Snake Stewart on
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I feel like a red headed step child.
Everytime I turn around, Parker is going all "Snake" on somebody and I aint nowhere to be found!
Either that or she is writin songs about it. Its amazing what can happen in a weeks time on this site! HA!HA!HA!
Snake, living quietly and without malice, while on his vacation. God Bless His Soul. :-)
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Permalink Reply by Adam on
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Back on topic,
In regards to the bonus money, yes $500 is in the ballpark of what is being given currently in Shelby County. There will always be someone saying they have received more, but the fact is, this is what we offer and what I have heard being offered by other companies.
On the working interest, the landman can tell you he wont "suspend" you all he wants. He is simply a landman. He does not make these decisions. Unless he is a senior landman or an in-house landman, his job is to get you to sign the lease at terms that are acceptable to you and his company.
If you want to become a working interest partner, you will have to sign a lease with someone (make up a company) and then file through MIPA to force yourself into the unit. This will cost you money and may be more than you want to take on.
Texas does have forced pooling, however I dont believe it applies to undivided interest owners.
Hope this all helps.
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Permalink Reply by Robert G. Oliver on -
I think you are mistaken about Texas having forced pooling. The Companies can pool their acreage with other Companies agreage to form a unit, But the state cannot pool your acreage without your
permission like they can in Olka. or Arkansas.
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Permalink Reply by Sarah on
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Thanks for the information Robert. WE love ya. I hope your soul feels very blessed. :) It should!
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Sorry Robert but Texas does have forced pooling. I am typing from my phone so I cannot copy and paste but do a search for forced poolings in fort worth. You will see that is has been happening.
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Permalink Reply by Eric Camp on
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Yes they can. See the recent Finley Resources Case decided by the Railroad Commission in August 2008.
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Permalink Reply by Sarah on
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Thanks a lot Adam for all the information you've given here as well. Okay...here's a dumb question.
What is MIPA? Also, I don't know what ya'll mean when you say undivided interest owners...is that like one person owning the minerals as opposed to six? Or is that minerals that are all undivided in one place. My minerals are divided up all thru the unit, is what I was told.
How do I research how much it would cost to force myself into the unit if they do decide they don't want my minerals after all or me being a working interest. I'll look for an MIPA website and try to call them.
Is the reason they don't want working interest partners because of the paperwork and hassle? Or is it because of profit? Thanks!
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Permalink Reply by Sarah on
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MIPA... Mineral interest pooling act? It seems as though MIPA is to force the mineral owner to pool their minerals not force the oil and gas company to take you on as a working interest partner. Anyone?
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MIPA as I understand it is to allow multiple companies to particpate together in a unit.
Undivided minerals means you have an interest in the minerals under a given piece of property. Say 6 acts under 150. You cannot say this is my 6 and this is you of 144. It may be easier to think of it as a fraction. The defining thing is that your 6 acres cannot be defined by metes and bounds.
The only way an undivided mineral owner can assure participation in a unit is by leasing to a company. The company must then make a reasonable offer to the operator. If the operator refuses, the lease holder can then file through MIPA.
You can then figure out what your interest is in the unit and multiply that times the cost of the well. That is what you will have to come up with to be a working interest partner.
Hope that covers it. I do a lot of responding from my phone so it is hard for me to read everything and remember to rwpond to it all. y
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Permalink Reply by kane on
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from what i have seen there is very little case law regarding MIPA; as a result it is hard to gauge what type of success a mineral owner has to force his or her way into the declared pooled unit. Apparently it is not very high success rate when you compare the lack of case law against the plethora of declared units created in TX; you think there would be more case law to utilize. if you don't lease and if you are not the surface location then you could certainly be out of the declared pooled unit without any recourse on your behalf.
On a WI standpoint, if the well is 18,000' deep, then the costs could be closer to $15mm to drill and complete and possibly $20mm. I would be careful with the WI strategy.
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Permalink Reply by The_Baron on
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I can not speak for pooling laws in TX. But as far as working interest, you will need a large amount of capitol. For example, in LA, with a typical 640 acre unit, a one acre tract is 0.00155625% of the unit, so in a typical horizontal well with multistage fracs, that costs about 8 million, your share in expenses would be $12,500 per acre. This would be before any production revenue is received. There would also be monthly operating bills coming in. On top of that, the 8 million is assumeing nothing goes wrong.
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