Replies to This Discussion

Permalink Reply by king john on August 27, 2009 at 7:06

winter, could you explain how the O&G companies get your minerals for nonthing if you dont accept their low ball offer ? i have not heard of this and would like to know more. also the lease bonuses will go up as soon as prices come back in line. or mabey you are lucky enough to be in the oil play and you wont have to wait as long.
kj

Permalink Reply by intrepid on August 27, 2009 at 11:33

kj, she may be concerned that if she doesn't lease her property could be drained. if she has a small tract and won't lease she may have herd that she could be drained from wells on nearby tracts under lease. have you ever heard of that? what's the chance that it could happen? I don't know.

Permalink Reply by king john on August 27, 2009 at 12:41

intrepid, Mmmarkkk has a good discussion on the main board titled well spacing consideration with a very good lecture video . it does address this very issue. it is a bit lengthy, but well worth watching.
kj

Permalink Reply by king john on August 28, 2009 at 12:29

Mmmarkkk's discussion on well spacing is about to go off the main page so here is a link to it. i highly reccomend watching the lecture. very good information...
http://www.gohaynesvilleshale.com/forum/topics/well-spacing-conside...
kj

Permalink Reply by intrepid on August 28, 2009 at 14:48

Thanks, kj, for linking to that and calling my attention to it. It's very informative and should calm some fears abot drainage but the issue that still worries me is the courts refusal to make changes in the rule of capture.

Permalink Reply by intrepid on August 27, 2009 at 11:34

Laurie, have you gotten any offers lately?

Permalink Reply by Laurie on August 29, 2009 at 2:45

Yes, 500acre 20% off tap and no fees or 22.5% and pay portion of fees to make marketable...What does anyone know about that? If given that option which is the way to go, nevermind the per acre rate..which is the better way to go?

Permalink Reply by intrepid on August 29, 2009 at 15:40

What kind of language are they offering you? Something like this? ( I am NOT a lawyer)

(c) For purposes of this lease, “Gross Proceeds” means the total consideration paid for oil and gas produced from the premises, with the following exceptions:
(i) Lessor's royalty shall bear its proportionate part of severance taxes actually paid by Lessee attributable to production from the leased premises.
(ii) Lessor's royalty shall bear Lessor's proportionate part of any costs of transporting oil, gas or liquid hydrocarbon products paid to any third party which is not an Affiliate of Lessee.
(iii) If gas produced from the premises is processed for the recovery of liquefiable hydrocarbon products prior to sale, and if such processing plant is not owned by Lessee or any Affiliate of Lessee, Lessor's royalty shall be calculated based upon the consideration received by Lessee (or any Affiliate of Lessee) from Lessee's (or Lessee's Affiliate's) sale of such liquefiable hydrocarbons and residue gas, less Lessee's proportionate part of severance taxes thereon.
(iv) If gas produced from the premises is processed for the recovery of liquefiable hydrocarbon products prior to sale, and if such processing plant is owned by Lessee or an Affiliate of Lessee, Lessor's royalty shall be calculated based on (a) 80% of the consideration received by Lessee (or any Affiliate of Lessee) from the sale of all products extracted from such gas, plus (b) the total consideration received by Lessee (or any Affiliate of Lessee) from the sale of all residue gas, less Lessee's proportionate part of severance taxes thereon.
(v) No royalty shall be payable on gas used on the leased premises for production operations or compression or dehydration of gas produced from the leased premises.

(d) Lessee shall place oil and gas produced from the premises in marketable condition and shall market same for as agent for Lessor, at no cost to Lessor (except as provided in c. above). Except as expressly provided in c. above, Lessor's royalty shall not be charged directly or indirectly with any of the following: expenses of production, gathering, dehydration, compression, manufacturing, processing, treating or marketing of gas, oil, or any liquefiable hydrocarbons extracted therefrom.

I am NOT a lawyer.

I think the above is a pretty good example of a 'no cost' lease. Others may differ. If so, please provide an example of what you have found to be the best 'no cost' lease language that is actually in effect.

Your question might seem quick and easy but it may not be. Depends on the actual words they are proposing in the lease. Talk to someone who can review the actual language and be SURE you are actually getting what you think you are getting.

I would rather have a no cost lease but at the higher rate. There are some out there.

Permalink Reply by Jimmy on September 9, 2009 at 6:02

Just kick back and dont worry about finding the companies. They will find you once they need to. Remember, if you OWN the minierals, you are in good shape. NO ONE CAN TAKE THEM from you. In addition, dont let them try and talk you out of the spike periods in the value of what you should get.

Here is some food for your thought. We have property both in Shelby as well as other parts of Texas. A piece of property down south was explored. As a result, the company we leased to in order for them to walk on and simply do seismic work paid us $150 per acre just to walk on it. Therefore, dont settle for some $300-$600 con for your minerals that you OWN.

Tired of these company's lying while enjoying their bonus money they receive for jipping you out of your cash!

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