Replies to This Discussion

Permalink Reply by GJ Jasko on October 22, 2010 at 5:15

I just now returned from the Post Office with a large check from EOG for a fresh lease on my mother-in-law's property in JA Chireno and R Totin Surveys. EOG is for real and actively drilling. As is typical in a hot play, virtually all of the landman work for active operators is performed by contractors but the actual lease is with the exploration company. All of the outfits you mentioned are active operators in the area. BTW we received a call from Exco the other day (concerning the aforementioned property) and they too are active. Opener was $3k/acre and a quarter royalty.

Permalink Reply by adubu on October 22, 2010 at 5:46

Montana--- congratulation on having minerals in hot area of play primary Bossier Shale plus some Haynesville shale. If you are not knowledgeable about leasing do lots of reading on this site about lease terms and then have a good oil & gas attorney re-write the lease for you that operator will agree too-- remember ask for everything because all is negotiable and since there are several good operators wanted to lease your minerals take your time---personally I would go with EOG but don't let them know they are your choice. Good luck and wish you lots of good wells. How many net minerals do you have?

Permalink Reply by Montana Slim on October 25, 2010 at 2:23

Thank you Adubu. We have 400 acres total. It is split up between a few cousins. Interesting process unfolding. Do you have experience with a "top" or "overlay" lease? Evidently that is what is being offered.

Permalink Reply by adubu on October 25, 2010 at 3:37

Montana--- a top lease is generally when a primary lease is about to expire and the Lessee does not have a option writen in the lease to simply pay a bonus to extend the lease plus no time to drill before ex[piration. That good if there is no extention in the lease and reason to never give a option in a lease. So A top lease will be the same as a new lease is signed before old lease expires. Act on it as a new lease-- bonus and all terms--- with 400 acres must get a oil & gas attorney to review and write everything for you and all your cousins should join in with you. 400 acres is enough for a unit for operator to drill if all the 400 acres are in contagious. You are in "driver seat" Do not let them force you into signing a fast lease. Talk with all and together see attorney. Who's your present lease with? You want minimal 25% r with all the good pugh clauses, etc Happy for all your family.

Permalink Reply by adubu on October 28, 2010 at 0:34

Montana Slim-- just a follow up to see what's happening with your negotiation on the top lease? Also you are not obligated to negotiate or resign with this one operator. You can sign a top lease with another operator if you get better deal and terms however EOG would be my choice. If you sign with another operator it would only be effective at date of present lease expiring, but if you signed and then your present lease got drilled or put in unit before expiration the new lease would be cancelled with new operator as your old lease would stay in force but you would be able to keep % of bonus money from other operator as their cost of doing business attempting to get lease from you.