Replies to This Discussion

Permalink Reply by JWC on February 24, 2010 at 13:43

I did a little research on allowing seismic testing before leasing. I am certainly not trying to sway anyone one way or the other but wanted to share what I found. Bill Fergi is correct "Do what is best for your group". Below is what I found:

WHY SHOULD I ALLOW SEISMIC CREWS ACCESS TO MY PROPERTY?

"Much of the answer to this question depends on whether the one asking has an ownership interest in mineral development. If minerals are not owned, the risks associated with seismic exploration, however small, are not worth the minimal per acre payment.

Timing of seismic exploration in relationship to leasing is also worth considering. The presence of the gas-rich strata known as the Barnett Shale is undisputed through-out much of North Texas. Seismic data is not used so much as to verify the presence of gas bearing formations as much as to allow proper placement of drill sites and horizontal lines to avoid subsurface problems and maximize well potential. Most reputable drilling operators will require access to seismic data prior to drilling, although historic seismic information is available throughout much of southern Denton County.

After a lease has been finalized and the bonus money credited, allowing seismic analysis of the subsurface will improve the ability of the operator to plan and stage the drilling and fraccing process. Agreeing to limited seismic testing at this stage, therefore, offers the potential to increase production on which a mineral owner's royalties will be based.

Before that point, however, allowing seismic operations can have the same effect as laying down your card hand for your opponent to evaluate prior to bidding against you.

Seismic data is closely guarded by operators who often share results with each other. Information is used pre-leasing to determine both value and selection of sites on which leases may be sought.
Mineral owners without benefit of the results are at the mercy of operators in determining the reasonable value of their minerals. In some cases, operators who may otherwise have leased property and paid significant bonus rentals may withdraw offers completely after seismic testing reveals impediments so significant that the property is effectively condemned. This is referred to within the industry as “seismic condemnation” and can eliminate lease offers.

Regardless of when the decision is made to allow seismic testing, protective clauses for reasonable setbacks and requiring evidence of insurance should be part of the negotiation process prior to allowing seismic access.

Understanding how and when seismic testing is effectively used is the best step in determining whether and when to agree to allow seismic crews access to your property."

Permalink Reply by Benedumtreesoilwell on February 27, 2010 at 11:22

Seitel is a very crooked company from my experiance with them. Lease agreements mean nothing to them as they do not follow through. However if you must use them, additional details in the contract must be added and then keep your eyes on your property once they arrive and begin their work.

Permalink Reply by 5thGenTexan on February 27, 2010 at 11:34

What "additional details" should be added to the contract? In what way are they a "crooked company"?

I need to know before we sign up around 1000 acres.

Permalink Reply by Benedumtreesoilwell on February 27, 2010 at 12:05

I will be happy to inform you on any information you like. Send me an email and I will gladly let you know.

Permalink Reply by farmbrad on February 27, 2010 at 14:13

WilliamS,
I just sent you a friend request. We're fixing to mail the paperwork to Seitel & I'd like to it right. The 1st offer they sent only included a piece of our property not the entire platt. We told them all or none & they took in the rest of the acreage. We have a 12 year old pine plantation that I really have some concerns about them cutting through. Any info appreciated....

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