Know Your Rights - Texas Mineral Law
Place to discuss and learn about oil and gas legal issues in Texas.
Production Sharing Agreement
Panola County -
We are being encouraged to sign a Production Sharing Agreement by Anadarko that will effect our minerals in Panola County in order to drill a Horizontal Haynseville Shale Well (these minerals have been HBP since the 40's with a 1/8 royalty and we do not want to reduce our revenue in a future well by increasing in unit size). Does anyone have any information, suggestions or history regarding these instruments?
More production will mean more money, but mainly we are curious as to our negotiation leverage (if any) to gain a better royalty.
I was suggested to post this question here, thanks.
Ben Elmore
A lot depends on the size of your tract, your net mineral ownership in that tract, your proportionate share of unit wnership on a surface acreage basis, and whether or not you would be considered a drillsite tract. Can you provide more detail as to the size of your tract and net mineral acres, and have they provided you a plat of the proposed well? Ultimately, you want to create sufficient leverage to negotiate an amendment to your lease with an increased royalty and better terms, including a bonus possibly, in exchange for your agreement to sign.
Jul 11, 2012