Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on March 15, 2012 at 10:37

All state O&G Commissions are pro-industry, just some more than others.  Arkansas is particularly so as 7 of 9 sitting commissioners are employed in the industry with five owning their own O&G  or contract drilling company.  Foxes never make rules favoring chickens.  However there is another reason that AR mineral codes as so unfriendly to mineral owners.  The law allows minerals to be severed from the surface estate in perpetuity.  This makes it very difficult to perform orderly development as mineral tracts can be divided into many ownership interests each with incredibly small and ever shrinking fractions of an acre.  I suspect that the commission would point to that fact and say in effect that we would never be able to drill many wells nor generate much money for state coffers without the Forced Integration laws as written.  And they would be right.  Comprehensive reform of mineral codes would be required to fix this problem and I doubt that it would be possible. 

Permalink Reply by obed w odom on March 15, 2012 at 10:47

Skip, doesn't Texas also allow minerals to be severed from the surface estate in perpetuity? Of course, for all I know Texas may also be very pro-industry. I do like Louisiana's 10-year prescription law.

Permalink Reply by Skip Peel - Mineral Consultant on March 15, 2012 at 10:59

Yes, Texas and Oklahoma allow for permanent severance of the surface estate.  I think most petroleum producing states do.  LA is different, again.  But this time in a good way IMO.  I think fee owners (those owning both surface and mineral estates) are better stewards of both.  And families who plan to hold their surface down through the generations have the option of monetizing their minerals with the thought that a future generation will recover them through 10 years of non-use.  This can be especially effective when selling minerals only for a specific zone or formation. 

Permalink Reply by The_Baron on March 16, 2012 at 2:59

In my knowledge only LA and Michigan have prescription.

 

Most states minerals are treated as property, while in LA, you do not own the minerals, just the right to explore for those minerals.

Permalink Reply by The_Baron on March 16, 2012 at 2:57

Lets be fair.

 

The AOGC is simply following state law. State law states how tracts are to be force integrated.

Permalink Reply by Mitch King on March 19, 2012 at 4:21

375 is the average cost to acquire acreage, not the average bonus price
(in other words, the cost of the broker is included in the 375 number in addition to the bonus).  As every person on here can attest, 300/acre is almost always the max number you see people leasing at.  Now if the going rate goes up, hope somebody will post about it!!

 

Nothing fishy about it.