Replies to This Discussion

Permalink Reply by Butterfoot on August 28, 2008 at 11:09

What company made you the offer that you accepted? What part of the county is your mineral interest located?

Permalink Reply by jffree1 on August 28, 2008 at 12:20

Newcomer,

There is no drilling in Sabine County yet. Nothing permitted since '07 that I am aware of. They are trying to lease up their areas of interest (that they had when they came here)...If your land is not in one of those areas then you could wait a long time for a call. If you ARE in one of those "areas of interest" you could still wait awhile for a call because they are going to work the larger tracts first. And, also, because they have been inundated with calls and visits from people all over the county who don't want to get left out (at 5K an acre).

My idea is that the longer you wait the better the offers will be. The really big money may not happen until we do get some "good" well data (and more competition between the O & G's)... Keep checking the RRC site. Sooner or later those well permits will start appearing.

And keep up with what your neighbors are getting and ask for more if everyone else is getting more in your area. You don't have to accept 5K just because you are on the book. They are not happy that we are so quickly informed about what our neighbors are leasing for. It makes it nearly impossible for them to offer you peanuts if you tell them that you know what they paid ol' Joe down the road.

Permalink Reply by Sandstone on August 28, 2008 at 16:52

How true it is! First offers in Sabine Parish last April -May were 1000. They then leased the largest landowner for 1500. an acre. Next came the $4000 offers with a lot of people signing. At last they went to 13,500. and finished up the sections they wanted to drill in paying 18,500.

Permalink Reply by griiker on August 29, 2008 at 10:58

We had leased some land to Cabot three years ago, with a 2 year option. yesterday, I received notice that they are exercising the option. When they leased it, it was long before the Haynesville excitement, so the amounts are abysmally low, $75 an acre. El Paso has also exercised an option in Shelby. Never the less, they are getting serious about drilling in These counties.

Permalink Reply by jffree1 on August 29, 2008 at 13:51

I do believe you may be right. My cousin got one of those option letters and has been down in the dumps over it for weeks. $50.00 ac on 80 acres...3/16 royalty. Lease assigned by PXP to Cabot. He's so hoping they don't get him in a producing unit. Two years is a long time to agonize over it though.

Permalink Reply by ogmladvisor on October 10, 2008 at 11:48

Why on earth would he be hoping they don't put him in a unit? Have you taken the time to look at any of Cabot's press releases? They are drilling great wells, and if he is lucky enough to get in a unit with 80 net acres, he won't ever be down in the dumps over this again. Also, the era of giant lease bonus payments is quickly coming to a close...that ship has left the dock, as they say.

Permalink Reply by jffree1 on October 10, 2008 at 16:20

That is definitely another way to look at it. But this man is 80 years old and he feels foolish that he signed a lease agreement (thinking that he'd never, ever see his land in a producing unit) that will not benefit his wife and daughters as well as it could have with better lease terms (not to mention, the disparity in bonus money). That's all. He just didn't have the information three years ago that we have today.

All is not lost though...he has another 47 in Sabine County that he may eventually get a nice bonus on (along with better terms and royalty).
I never meant to cast doubt on Cabot. I have heard that they are a good company to do business with. I was commenting on two year options and how sometimes what we sign can come back to haunt us. That was my point. Apologies if I didn't make myself understood.

As to your view that the giant lease bonuses are a thing of the past...yes, they may be TODAY. But I don't think you are going to see many takers at $100.00/acre for a good long while.