Replies to This Discussion

Permalink Reply by TEXWS6 on December 31, 2009 at 14:36

Re-read my post CAREFULLY. I know the oil and gas business is SOMEWHAT new to NWLA, but, I have been around this business my WHOLE life, have a family oil business, and have businesses in the family that depend on the oil and gas business.

This IS about transportation costs!

Here's how the oilfield works. As a mineral owner you are entitled to a lease bonus and royalties, part of your royalties will be deducted to get YOUR product to market. If you want to gripe about paying transportation/shipping costs, go put your own 10 million dollars down to drill your minerals and then build a pipeline, and then negotiate with a company to guy your product for a given price. That's how it works, that's how it's ALWAYS worked, and that's the oil and gas business. The Haynesville is nothing different, special rules shouldn't apply to one play as opposed to another. When you try to start applying these special rules and objecting what has always been the way of doing business, companies will take their money and go play elsewhere.

Look at the Barnett, prime example, too many tree huggers griping, complaining, etc. There will NEVER be the activity there that there once was.

You people have one of the GREATEST assets sitting underneath your feet, don't ruin it. These oil and gas companies are here to make money, yes, we all know that. The good ones will take care of the environment and people in the process, just dont' drive them away! I promise one day you'll understand.

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Permalink Reply by sesport on December 31, 2009 at 18:36

ROTFL, I wonder if any of our business district folks are reading this. You KNOW they're ROTFL, too. 80)

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Permalink Reply by TEXWS6 on January 2, 2010 at 9:52

So you are telling the NW La has seen this type of activity before? Maybe I mis-spoke and should have said the the activity level and international spotlight is new for this area. Not full of myself, but I have an pretty good idea on what is going on with this particular scenario.

It's idiots like you that can't have a civil discussion, even on a forum such as this, much less in person.

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Permalink Reply by sesport on January 2, 2010 at 10:23

TEX - lol, Do yourself a favor and do a little homework on SONRIS, notice some of the names attached to activity around here. Our mineral codes weren't just written last year, either.

80)

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Permalink Reply by sesport on December 31, 2009 at 15:51

BirdDawg - See if this doc helps. Look in Part III, Sect D2b on page 39.

http://www.landman.org/content/File/Comparative%20oil%20and%20gas%2...

2. ITEMS OF EXPENSE DEDUCTIBLE FROM ROYALTY PAYMENT
Louisiana law appears generally similar to Texas. Certain post-production costs are proportionately borne by lessor and lessee in the absence of a provision in the lease or other agreement to the contrary:
a. gross production and severance taxes -- Sartor v. Union Carbon Co., 183 La. 287, 163 So. 103 (1935); Wright v. Imperial Oil & Gas Products Co., 177 La. 482, 148 So. 685 (1933);
b. transportation -- Wall v. United Gas Public Service Co., 178 La. 908, 152 So. 561 (1934);
c. treatment and dehydration -- Compare Freeland v. Sun Oil Co., 277 F.2d 154 (5th Cir.), cert. denied, 364 U.S. 826 (1960);
d. extraction of liquids -- Freeland v. Sun Oil Co., 277 F.2d 154 (5th Cir.), cert. denied, 364 U.S. 826 (1960); Crichton v. Standard Oil Co. of La., 178 La. 57, 150 So. 668 (1933);
e. compression costs -- Merritt v. Southwestern Electric Power Co., 499 So.2d 210 (La. App. 2d Cir. 1986).
Certain ordinary and customary costs for gathering, handling, treating, separating, dehydrating and processing performed on the lease are generally not deductible based on either industry custom or specific language in the lease. Note also that even if an expense falls within a category that is otherwise deductible under the lease form in question, both the amount of the expense and the manner in which that expense is allocated to the lessor must be justifiable. The lessee is under an implied obligation to prudently market for the mutual benefit of the lessor and lessee. See Louisiana Mineral Code Article 122, and official comments thereunder. Many custom form leases contain complicated royalty provisions which deny or restrict deduction of various costs from calculation of royalty payments to the lessor.

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Permalink Reply by essay on December 31, 2009 at 12:59

pipelines aside, what i'm wondering is whether or not there's anything to the accusations of certain companies damaging EUR's in pursuit of high IP numbers to show shareholders.

i'm also wondering how provable something like that is.

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Permalink Reply by TEXWS6 on January 2, 2010 at 10:33

Essay,

Now you are talking my language, technical stuff. Why do you think high IP's damage EUR's?

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Permalink Reply by TEXWS6 on January 2, 2010 at 10:48

I have some opinions...you guys can't give it a break can ya'll?

What's your opinion on the subject?

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Permalink Reply by TEXWS6 on January 2, 2010 at 11:25

So what does this have to do with IP's and EUR's? Give it a break!

If that's your opinion, you are entitled to it.

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Permalink Reply by essay on January 2, 2010 at 15:49

i had to google fines migration but that makes sense to me, thanks jay.

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Permalink Reply by TEXWS6 on January 3, 2010 at 6:23

What type of fines? Formation or proppant? I know alot of operators flow their wells at high rates early on to "clean" up the well of any mobile frac sand/proppant and try to get as much water back as possible. There are numerous lab studies that show that Haynesville is somewhat unstable with high drawdown across the fracture face. But, the question is, can you replicate this in the real world? The "proof in the pudding" so to speak will be how these wells decline and what their long term production is. I think we are just merely drawing down high perm/high pressure streaks in the formation and do not believe in "natural fractures" in the Haynesville.

Hey Birdy, learn how to read, you illiterate b a s t a r d, I am not the one who brought this topic up....

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Permalink Reply by sesport on January 3, 2010 at 8:36

Think of it like running a diagnostic on the computer ... troubleshoot. I'm thinking there's more than one possibile explanation, multiple solutions. To the well problem, anyway. The last bout with language in violation of site rules left me with too many additional gray hairs. 80)

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