Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on January 11, 2010 at 12:37

Get the services of an experienced oil & gas attorney.

Permalink Reply by Kurt Grussendorf on January 11, 2010 at 13:24

Thanks for your reply, Skip. I just don't like the idea of this 2 week in-and-out period that could do some real damage that would take forever to collect. I had just never heard of such a brief time span--seems to me I should go for a longer term easement contract that would pay me so much per week or month something like a pipeline deal--although since they will be invasively pumping water and hauling it out there would be more wear-and-tear than with a pipeline. I would even let EOG sublease the rights out to other gas companies if the price were right. But, really, a $500 one time payment for 2 weeks worth of heavy pumping and hauling sounds awfully cheap. I just won't do it for that.

Permalink Reply by Skip Peel - Mineral Consultant on January 11, 2010 at 13:35

You're right to be concerned about potential damage. And $500 isn't worth your time. In your place, I would look for a O&G attorney with experienced in water supply issues. My interest would be to have EOG make whatever improvements would safeguard the land and prepare me to sell water to others. EOG will need much more than a couple of wells worth. And other operators need access to water. Wherever there is one well there will eventually be 7 or 8. You mentioned that you have no mineral rights and I would like to point out that you can still benefit from HS development. Water is a very valuable resource and an opportunity to develop long term income from continuing relationships with gas companies that will need that water for the next 20 years.

Permalink Reply by Kurt Grussendorf on January 11, 2010 at 13:53

You are right about other gas companies that will need access and the possibility of setting myself up and protecting rights over a longer term. They are trying to get to the lake and not actually taking water from any wells. I have alot of land along the lake that would give them access and a fairly level approach to it. The fact that they approached me and not the other landowners in the area makes me think I have a prime location that is worth negotiating. And the $500 dollars is indeed not worth my time. I think I will tell them that $100 dollar bills went out with the last Louisiana cowboy Cajuns they fleeced back in the days of Huey Long. No one even talks to presentday landowners without offering $1,000s.

Permalink Reply by Skip Peel - Mineral Consultant on January 11, 2010 at 14:22

Kurt, IMO it's not just about the one time money from EOG. It's about whether you would consider going into the water business. I obviously know nothing of the particulars of your situation but the opportunity is real and the potential income significant. Enough so that some good legal representation should be part of the plan should you choose to take advantage of that opportunity.

Permalink Reply by Steve on January 11, 2010 at 13:27

They would also need to get permission from the SRA ( Sabine River Authority ) to pull water from the lake

Permalink Reply by Skip Peel - Mineral Consultant on January 11, 2010 at 13:45

I imagine you are correct, Steve. But the fact is that E&P companies and interested landowners will figure out the process and utilize water from the lake as it will be a consistent and cost effective means of obtaining the water required to frac wells.

Permalink Reply by Kurt Grussendorf on January 11, 2010 at 13:58

That's right, Steve. I assume they already have this. There is government land along Bear Creek not far from my place. I bet they refused them access for environmental/wildlife reasons. I have one of the few privately owned larger tracts along the lake in that area. It is mostly level and easy for them to approach the lake from there. I think I will just sit tight and let them up the ante on the price while considering the longer term implications from a legal point of view. If they really want it they can pay for it. What an insult--in my book--to wave a few hundred dollar bills in my direction! A CEO at EOG Houston headquarters spends that much on his lunch tab.