Not sure if you received feedback regarding the two wells. The Moncla 31 #1 well (T16N-R13W-Sec 31) spud 5-4-08, drilled to 12485' (6/2/08). The RRT Trust #1 well (T16N-R13W-Sec 30) spud 3-21-08, drilled to 11939' (4/15/08). Both wells are vertical and waiting a gas pipeline before being completed. It is not yet clear what interval will be completed and produced.
You hit on something in your discussion of rentals that I've been thinking about... that there just aren't enough rigs and pipelines to drill out the entire area in 3 years. My land is in southern DeSoto parish, and I sit back and watch all the activity 25 miles to the north, do some math, and don't see how they will move down to me any time soon. So, I am thinking of getting leased fairly soon, under the hope that they don't get to me in 3 years. Then, I get more bounus money. What do you think?
msfva
Thanks for catching that one.That comment didn't come out right at all.Maybe it was my speed typing at 16 words a minute.I guess you really do have my back!!!!!!!Keep it up,I need all the help I can get.I would love to be organized to the point where this whole area was together! 7 or 8 Parishes would be a pretty formidable group! Wishful thinking because I am having a hard enough time with the clowns on my street.I am sure you are in a very similar situation.We ARE making a difference!Maybe small at this point but a difference none the less!
I don't have much time this a.m. However, I am putting 3 http addresses here for anyone who would like some reading material on the Barnett Shale Play in Texas.
I know, we are all in the middle of the Haynesville play, but the timeline and unfolding of the Barnett Shale Play is quite interesting (beginning 3+ years ago) and seems to be paralleling the Haynesville. Kind of like having two hunting dogs, one named Barnett and one Haynesville. One dog 3+ years old; one just a pup. One has mastered the hunt; one is learning from the other.
Anyway, here are the https:
http://startelegram.typepad.com/barnett_shale/
(Blog for Barnett shalers)
http://www.fwlna.prg/Gas%20Wells/Gas%20Well%20Resources.htm
(Ft. Worth League of Neighborhoods)
http://www.bseec.org/index.php/content/facts/leasing/
(Barnett Shale Energy Education Council)
and a little press (dated 5/16/08)@ pressconnects.com:
http://www.pressconnects.com/apps/pbcs.dll/article?AID=/20080516/NEWS01/805160355
"Gas drilling raises economic prospects"
and:
http://www.realestatejournal.com/buysell/regionalnews/20050504-gold.html
"Drilling for Natural Gas Faces Hurdle: Fort Worth" (dated 5/04/05 - The Wall Street Journal) (THREE YEARS AGO!)
Good Monday a.m. to all ning. Haynesville shalers! I am enjoying all the good info this morning.
Just an opine from me...
There is a very difficult consumer situation going on in the U.S. right now. Energy costs are soaring for the American family. In this situation - a crisis in the making that Americans have not had to deal with in a long time, some never - the Haynesville Shale play is "perversely" timing itself. Let me explain my myself.
The higher the energy costs go, the more O&G companies are going to jump in at hurricane speed and lease up all the land they can get their collective hands on, and drill and drill and drill...again, increasing their own costs. The more their costs, the more our costs at the consumer end of this national storm. The more WE, as consumers, don't want to pay the higher costs, the more WE would like to see the lease prices rise. And, it goes around and around again in every place O&G E&P is emerging (again).
Everything has its cost. We pay the consumer costs just like every other American consumer. Would it not be a good deal if the Haynesville Shale players (we) could get parish governments (who will make Millions from leasing out parish property) to write in those deals a local consumer addendum that: 1.) invests in local small businesses. 2.) invests in our school professionals and schools systems. 3.) invests in FAMILIES, i.e., healthwise, educationwise, family-friendly projects, kid-safe projects, after-school child care programs, Senior center projects, etc.
It is too bad it takes billions of dollars to find energy sources and get them to production. I could think of just-as-important ways to spend those billions on another lifelong energy project, the American Family...
Have a Great Monday. Keep joining and keep blogging.
Good morning to you. You raise what I think is the key point for remaining an unleased interest owner in a producing unit. By choosing that route, you are giving up the upfront bonus money and the 25% off the top. Instead, you are betting that the well(s) drilled in your unit will pay out, and the 100% net checks you get post-payout will make up for the bonus and 25% gross checks you gave up.
I think this really only works if you're a small landowner. Because of the need for the operator to lease a certain minimum percentage of a unit to make the prospect viable, if too many landowners with too much acreage are holding out on leasing in a section, it may mean that nothing gets drilled in the section. I personally have never seen a producing unit with more than 10% unleased interests, although I frankly don't know what the breakpoint will be in this climate.
Also, it can be unmitigated heck to police the operator's drilling, completion and operating costs. The statute only allows them to charge "reasonable" costs against your interest, but it can be difficult for the small guy to figure out exactly what that is.
By the way, I understand your frustration about information about O&G professionals. The business should always protect its trade secrets, but this information is just basic stuff about how things work. Although there is some obfuscation, no doubt, you should know that there are a whole lot of folks in the industry who don't understand unleased interest owner's rights in Louisiana. This is compounded by the fact that so many of these folks are now coming out of Texas, where unitization is handled a bit differently. That's a by-product of the fact that Shreveport's oil and gas industry picked up and moved to Texas back in the 80s.
Subject Forced Pooling per Haynesville Shale Play
Question I have read so much per forced pooling. I Live in Shreveport, LA...Approx. 90% of recent legal notices (6/17 thru 7/8) per LA Office of Conservation where O&Gs file applications, contain clauses of "force pooling" & "integrating of all separatly owned tracts, mineral leases, and other property interests...with each tract sharing in unit production on a surface acreage basis of participation..." What exactly does this mean to (us) the landowners (who are attempting to acquire better land leasing deals)? Are they attempting to get out of lease bonus moneys? Nothing really sounds great about being force pooled. If you could give me (and my fellow Haynesville Shale stakeholders) the ups and downs per these forced pooling clauses if they are granted by the LA Commissioner of Conservation...Thanks so much for your help.
Answer Dr; I'm not sure if you're talking about the pooling clause that is commonly found in leases, or about the pooling process that occurs when companies either can't locate or can't come to an agreement with some of the mineral owners in a tract they are attempting to lease.
In the first example, don't worry about it. Most leases have pooling and unitization clauses that allow the lessee to "pool" or "unitize" several or more leases together in order to increase production from a field of oil or gas. If they were not allowed to do this, much production could remain in the ground. While there is the potential for abuse, in most cases you will never even get this clause activated as it is used mainly on fields that are nearing depletion.
This type of pooling and unitization elects one well to inject a substance into it (perhaps salt water) in order to "push" the oil or gas out the other wells that have been pooled. Each mineral owner would share in the production from ALL the wells that were unitized. While your royalty fraction will be less in such a scenario (the newly created unit includes more land than your original lease did) you will still potentially receive more money in the long run as more of the oil or gas reserves are able to be recovered.
If you are instead referring to the forced pooling process; this basically means that you will be "leased" at terms dictated by the State; based on what they think is "fair." A pooling order generally is good for only one year or less, meaning that if they don't drill within the time specified in the pooling order, the order will expire and you will be free to lease again. If you are pooled, and there is production from the well that is drilled, you will be paid based on your election of one of the several options afforded you in the pooling order. If you ignore the pooling order, a choice will be made for you by the terms of the pooling order.
Some people prefer to be pooled, rather than lease to a company they can't reach an agreement with. They feel that the State will offer better terms than the company was offering.
Hope this helps explain the pooling process.
Frederick M. Scott CMM
Answered Question...I want to thank Mr. Scott for his timely and knowledgeable information (and for putting it into an understandable format). I appreciate him answering my questions that I sent to "AllExperts.com" for his reply, last week.
Thank you again, "AllExperts.com" I have enjoyed all the Q&As that your experts put together that are helping the rest of us learn more about the O&G Industry.
Would you help me out...? I'm still trying to understand forced pooling. I don't see that it is all that bad or unfair to the landowner. If I assume I'm willing to pass up the bonus, then what this seems to say is that I get 100% (minus the cost of the well, as well as some operations and maybe some risk money for the driller) of the royalties. So while everyone else gets 25%, I'd be getting 100%? If these wells produce 5BCfe of gas on 120 acre spacings (this is what Petrohawk is telling Wall Street), that's about $400,000 per acre payout over the life of the well. If, by passing up $10,000/acre up front, I could get all $400,000, rather than 25% of that, that doesn't sound too bad to me.
Am I interpreting the law reasonably? Is this how it works?
Aside from not getting lease money, are there any drawbacks?
Thanks,
msfva
I saw the DNR web site your talking about. Forced Pooling has been my greasted worry too. There is not much in the internet about Louisiana forced pooling laws it either.
How are we to hold out and get what are mineral rights are worth if they can swoop down and force pool us.
I read this post on the shreveporttimes.com forum.
"The mineral rights are being leased in 640 acre “pools”.a. Once ¾ (75%) of the land owners sign leases the remaining ¼ (25%) of land owners are “Unsigned lease holders” with no lease agreement.b. The Un-leased mineral owner within the pooled unit is not entitled to receive any share of production or proceeds until the unit operator recovers the cost of drilling, completing, equipping and operating the well."
PS. I am trying to get a web site up with all my notes and links on it.
Spent all afternoon downloading "legal notices" per the public hearings that are set by the State of LA Office of Conservation, for O&G company applications to drill, spacing of wells, etc., etc., etc.
Seems strange to me: Prior to June 17, 2008, you CANNOT find but a handful of applications/legal notices(per hearings) that contain this: "#2. To force pool and unitize all separately owned tracts, mineral leases and other property within the proposed units in accordance with Sect. 10, Title 30 of the LA Revised Statutes of 1950, with each tract to share in the unit production on a surface acreage basis of participation".
Again...I looked through and read notices begining Jan. 8, 2008...finding just a few legal notices that contain #2.
Why? Why do 90% of the legal notices posted June 17th and following (assoc. with the "Jurassic" or Haynesville shale) (O&G names include Goodrich, Chesapeake, Camterra, Ark-La-Tex Energy, Beusa Energy, Matador, Encana, Cypress Operating, Sklar, Winchester, etc....contain #2?
If anyone can explain or better communicate this "FORCED POOLING" matter and just what these O&G companies are attempting to do with these applications containg same, I would appreciate some feedback ASAP.
Is this a "plus" for the O&Gs or is this a "plus" for the landowner being force pooled? I keep reading negative comments and negative info regarding "force pooling." Do the O&G's get out of paying "bonus" moneys to the pooled mineral owner?
I am sure the O&Gs know exactly what is up...But...doubt that the CEO of Chesapeake is reading this blog. However, here is the invite to him...join the discussion...
I know what I believe about this situation...but for now...will wait for wiser friends than me to respond.
DrWAVeSport Wed. 6/4/08 p.m. Sure am enjoying all the discussions!!!
P.S. I am finding...that the really helpful info is coming from fellow bloggers...and the O&G experts stay pretty dodgy when one tries to get some frank and honest info. Thanks Fellow Bloggers...I "s"HAIL" you all...
DrWAVeSport Cd1's Comments
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msfva
I don't have much time this a.m. However, I am putting 3 http addresses here for anyone who would like some reading material on the Barnett Shale Play in Texas.
I know, we are all in the middle of the Haynesville play, but the timeline and unfolding of the Barnett Shale Play is quite interesting (beginning 3+ years ago) and seems to be paralleling the Haynesville. Kind of like having two hunting dogs, one named Barnett and one Haynesville. One dog 3+ years old; one just a pup. One has mastered the hunt; one is learning from the other.
Anyway, here are the https:
http://startelegram.typepad.com/barnett_shale/
(Blog for Barnett shalers)
http://www.fwlna.prg/Gas%20Wells/Gas%20Well%20Resources.htm
(Ft. Worth League of Neighborhoods)
http://www.bseec.org/index.php/content/facts/leasing/
(Barnett Shale Energy Education Council)
and a little press (dated 5/16/08)@ pressconnects.com:
http://www.pressconnects.com/apps/pbcs.dll/article?AID=/20080516/NEWS01/805160355
"Gas drilling raises economic prospects"
and:
http://www.realestatejournal.com/buysell/regionalnews/20050504-gold.html
"Drilling for Natural Gas Faces Hurdle: Fort Worth" (dated 5/04/05 - The Wall Street Journal) (THREE YEARS AGO!)
Natural gas? The new gold?
Just an opine from me...
There is a very difficult consumer situation going on in the U.S. right now. Energy costs are soaring for the American family. In this situation - a crisis in the making that Americans have not had to deal with in a long time, some never - the Haynesville Shale play is "perversely" timing itself. Let me explain my myself.
The higher the energy costs go, the more O&G companies are going to jump in at hurricane speed and lease up all the land they can get their collective hands on, and drill and drill and drill...again, increasing their own costs. The more their costs, the more our costs at the consumer end of this national storm. The more WE, as consumers, don't want to pay the higher costs, the more WE would like to see the lease prices rise. And, it goes around and around again in every place O&G E&P is emerging (again).
Everything has its cost. We pay the consumer costs just like every other American consumer. Would it not be a good deal if the Haynesville Shale players (we) could get parish governments (who will make Millions from leasing out parish property) to write in those deals a local consumer addendum that: 1.) invests in local small businesses. 2.) invests in our school professionals and schools systems. 3.) invests in FAMILIES, i.e., healthwise, educationwise, family-friendly projects, kid-safe projects, after-school child care programs, Senior center projects, etc.
It is too bad it takes billions of dollars to find energy sources and get them to production. I could think of just-as-important ways to spend those billions on another lifelong energy project, the American Family...
Have a Great Monday. Keep joining and keep blogging.
I think this really only works if you're a small landowner. Because of the need for the operator to lease a certain minimum percentage of a unit to make the prospect viable, if too many landowners with too much acreage are holding out on leasing in a section, it may mean that nothing gets drilled in the section. I personally have never seen a producing unit with more than 10% unleased interests, although I frankly don't know what the breakpoint will be in this climate.
Also, it can be unmitigated heck to police the operator's drilling, completion and operating costs. The statute only allows them to charge "reasonable" costs against your interest, but it can be difficult for the small guy to figure out exactly what that is.
By the way, I understand your frustration about information about O&G professionals. The business should always protect its trade secrets, but this information is just basic stuff about how things work. Although there is some obfuscation, no doubt, you should know that there are a whole lot of folks in the industry who don't understand unleased interest owner's rights in Louisiana. This is compounded by the fact that so many of these folks are now coming out of Texas, where unitization is handled a bit differently. That's a by-product of the fact that Shreveport's oil and gas industry picked up and moved to Texas back in the 80s.
Question I have read so much per forced pooling. I Live in Shreveport, LA...Approx. 90% of recent legal notices (6/17 thru 7/8) per LA Office of Conservation where O&Gs file applications, contain clauses of "force pooling" & "integrating of all separatly owned tracts, mineral leases, and other property interests...with each tract sharing in unit production on a surface acreage basis of participation..." What exactly does this mean to (us) the landowners (who are attempting to acquire better land leasing deals)? Are they attempting to get out of lease bonus moneys? Nothing really sounds great about being force pooled. If you could give me (and my fellow Haynesville Shale stakeholders) the ups and downs per these forced pooling clauses if they are granted by the LA Commissioner of Conservation...Thanks so much for your help.
--------------------------------------------------------------------------------
Answer Dr; I'm not sure if you're talking about the pooling clause that is commonly found in leases, or about the pooling process that occurs when companies either can't locate or can't come to an agreement with some of the mineral owners in a tract they are attempting to lease.
In the first example, don't worry about it. Most leases have pooling and unitization clauses that allow the lessee to "pool" or "unitize" several or more leases together in order to increase production from a field of oil or gas. If they were not allowed to do this, much production could remain in the ground. While there is the potential for abuse, in most cases you will never even get this clause activated as it is used mainly on fields that are nearing depletion.
This type of pooling and unitization elects one well to inject a substance into it (perhaps salt water) in order to "push" the oil or gas out the other wells that have been pooled. Each mineral owner would share in the production from ALL the wells that were unitized. While your royalty fraction will be less in such a scenario (the newly created unit includes more land than your original lease did) you will still potentially receive more money in the long run as more of the oil or gas reserves are able to be recovered.
If you are instead referring to the forced pooling process; this basically means that you will be "leased" at terms dictated by the State; based on what they think is "fair." A pooling order generally is good for only one year or less, meaning that if they don't drill within the time specified in the pooling order, the order will expire and you will be free to lease again. If you are pooled, and there is production from the well that is drilled, you will be paid based on your election of one of the several options afforded you in the pooling order. If you ignore the pooling order, a choice will be made for you by the terms of the pooling order.
Some people prefer to be pooled, rather than lease to a company they can't reach an agreement with. They feel that the State will offer better terms than the company was offering.
Hope this helps explain the pooling process.
Frederick M. Scott CMM
Answered Question...I want to thank Mr. Scott for his timely and knowledgeable information (and for putting it into an understandable format). I appreciate him answering my questions that I sent to "AllExperts.com" for his reply, last week.
Thank you again, "AllExperts.com" I have enjoyed all the Q&As that your experts put together that are helping the rest of us learn more about the O&G Industry.
DrWAVeSport 6/7/2008 p.m.
Am I interpreting the law reasonably? Is this how it works?
Aside from not getting lease money, are there any drawbacks?
Thanks,
msfva
How are we to hold out and get what are mineral rights are worth if they can swoop down and force pool us.
I read this post on the shreveporttimes.com forum.
"The mineral rights are being leased in 640 acre “pools”.a. Once ¾ (75%) of the land owners sign leases the remaining ¼ (25%) of land owners are “Unsigned lease holders” with no lease agreement.b. The Un-leased mineral owner within the pooled unit is not entitled to receive any share of production or proceeds until the unit operator recovers the cost of drilling, completing, equipping and operating the well."
PS. I am trying to get a web site up with all my notes and links on it.
Seems strange to me: Prior to June 17, 2008, you CANNOT find but a handful of applications/legal notices(per hearings) that contain this: "#2. To force pool and unitize all separately owned tracts, mineral leases and other property within the proposed units in accordance with Sect. 10, Title 30 of the LA Revised Statutes of 1950, with each tract to share in the unit production on a surface acreage basis of participation".
Again...I looked through and read notices begining Jan. 8, 2008...finding just a few legal notices that contain #2.
Why? Why do 90% of the legal notices posted June 17th and following (assoc. with the "Jurassic" or Haynesville shale) (O&G names include Goodrich, Chesapeake, Camterra, Ark-La-Tex Energy, Beusa Energy, Matador, Encana, Cypress Operating, Sklar, Winchester, etc....contain #2?
If anyone can explain or better communicate this "FORCED POOLING" matter and just what these O&G companies are attempting to do with these applications containg same, I would appreciate some feedback ASAP.
Is this a "plus" for the O&Gs or is this a "plus" for the landowner being force pooled? I keep reading negative comments and negative info regarding "force pooling." Do the O&G's get out of paying "bonus" moneys to the pooled mineral owner?
I am sure the O&Gs know exactly what is up...But...doubt that the CEO of Chesapeake is reading this blog. However, here is the invite to him...join the discussion...
I know what I believe about this situation...but for now...will wait for wiser friends than me to respond.
DrWAVeSport Wed. 6/4/08 p.m. Sure am enjoying all the discussions!!!
P.S. I am finding...that the really helpful info is coming from fellow bloggers...and the O&G experts stay pretty dodgy when one tries to get some frank and honest info. Thanks Fellow Bloggers...I "s"HAIL" you all...
Keep up the good work.Surely there are more of us out here then I am seeing
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