Replies to This Discussion

Permalink Reply by chattykb on July 25, 2023 at 5:07

Skip what do you advise? I had gotten an offer to lease for Brine a few years ago & didn't do anything with it.

Permalink Reply by Skip Peel - Mineral Consultant on July 25, 2023 at 5:13

I think it is premature to sign a brine lease.  And under no circumstance would I include O&G mineral rights in the same lease.  It will be some years before processing facilities will be in place and drilling commences in areas that appear economic for concentrations of lithium and volumes of brine water.  All the current lease forms, shared and discussed here on GHS, are the worse, most one sided lease forms I have ever seen.  Since it is so early in the Lithium Land Rush, I doubt that lessees are likely to negotiate for better terms. They want to get as many unsuspecting mineral owners as possible to agree to these terrible leases first.  As the time for actual production nears, we should have a much better idea of the mineral rights value and what lease terms are possible.  I suggest that waiting is the best policy.

Permalink Reply by chattykb on October 17, 2023 at 13:26

Thanks! I've read through so many discussions & posts, I can't remember where I saw that you listed an Arkansas attorney that can help. Can you post that again please? 

Permalink Reply by Skip Peel - Mineral Consultant on October 17, 2023 at 13:30

I don't have an attorney to recommend for AR currently.  If it was me, I  would quiz some who work in Magnolia or Little Rock that have websites that list O&G/Minerals as areas of practice.

Permalink Reply by chattykb on October 17, 2023 at 13:42

Thanks!

Permalink Reply by Columbia1 on October 18, 2023 at 2:49

Agree with Skip that would be best to wait and that leases being offered are one sided, but what are your thoughts on waiting to the point where lessors get integrated into a brine unit? Appears likely the AOGC would then use a lease similar to what has been offered and there will be little to no chance of any changes in provisions when that happens. Also appears the financial benefits to lessor will be similar in either case because of AR state law setting the price of brine.

Permalink Reply by Skip Peel - Mineral Consultant on October 18, 2023 at 2:55

All good questions.....for an AR lawyer familiar with the existing regulations.  I'm also curious if anyone is lobbying the state for amendments to the brine regulations or new regulations all together now that the brine is known to contain a much more valuable component.  Lithium is a game changer.  One that AR mineral owners should be fairly compensated for.  The state regulators will likely do everything in their power to please the business investors.  I wouldn't expect the state to say no to anything ExxonMobil wants.

Permalink Reply by Lisa on October 18, 2023 at 3:07

Columbia 1 used a phrase that captures my concern too: “lessors get integrated into a brine unit.”

I know folks around my land in Franklin County, TX, have signed. I know I’m not ready to sign— but surely much later in this game, a landowner could be surrounded by other who have signed, and drilling would begin. What happens to the unsigned when the brine is being pulled up anyway? I was told at some point that their part would go into escrow until terms had been agreed to, but what would be the company’s motivation at that point to please the landowner.

I know we aren’t anywhere near that now, but I want to understand while it is in the future.