Replies to This Discussion

Permalink Reply by Cheerleader on March 13, 2010 at 19:04

Jiffree and ledlights,
Unfortunately, when the leases are signed we do not hear the final bonus because of the confidentiality clauses. Hearing the offers at $6,000 is encouraging. Holding out for $7500-$10,000 is in "the pipeline"!!!!!

Permalink Reply by ledlights on March 13, 2010 at 20:32

Thanks jffree1 and Cheerleader - I had missed the previous comments. I had read such bonus talk about S. Augustine but was unaware that it might have spread into Shelby and the edges of neighboring counties.

Permalink Reply by adubu on March 11, 2010 at 1:55

Is not this some what controlled by language in your lease in regard to unit size?

Permalink Reply by j garrett on March 11, 2010 at 2:06

Yes but most leases usually have langauge similar to this: "...shall not substantially exceed in acres 640 acres each plus a tolerance of ten percent (10%) thereof, provided that should governmental authority having jurisdiction prescribe or permit the creation of units larger than those specified...

ogmladvisor - I'm striking out looking for "Rule 86". Found a doc on landman.com but it still wasn't clear. Can you cut & paste some Rule 86 langauge and/or provide us a link? Thanks.

Permalink Reply by adubu on March 11, 2010 at 2:15

j garrett--found it---you can read all the rules on the RRC site in details-current rules chapter 3 oil & gas division

Permalink Reply by ogmladvisor on March 11, 2010 at 17:55

Just as jffree quoted the typical lease language:

"...shall not substantially exceed in acres 640 acres each plus a tolerance of ten percent (10%) thereof, provided that should governmental authority having jurisdiction prescribe or permit the creation of units larger than those specified..."

This language essentially says that should the RRC allow the formation of large units, then the lease allows it as well.

Permalink Reply by jffree1 on March 12, 2010 at 2:11

Thank you. Are the interest owners notified when a larger unit is applied for or does the acreage have to exceed even the allowances for the lateral length before notification is required?

Permalink Reply by ogmladvisor on March 12, 2010 at 3:02

It's no different than any other unit, so no. There is no "application" for a unit like there is a well permit - units are formed by pooling lands and leases with a unit designation filed at the county courthouse. I would guess that none of this will occur until after the well has been drilled, and the company can verify the needed lateral length has been achieved.

Permalink Reply by jffree1 on March 12, 2010 at 3:25

Thanks for giving interest owners a better understanding of how a well progresses from permit to final completion and royalty payments (the fun part).
If you ever have time would you write a little summary of all the things that have to occur before the checks go out? It would make a great discussion for the main page because the evolution of a producing well in Tx. differs somewhat with La. (which has been discussed at great length). Any Texas interest owner, who has never been involved in a well before, would be unfamiliar with the process and should be interested in such a discussion.

I've just been trying to ask intelligent questions that any layman might ask. Thanks, again.

Permalink Reply by j garrett on March 12, 2010 at 7:16

Martindale Cattle Co.?

Permalink Reply by Larry Mathews on March 26, 2010 at 4:36

I hold mineral rights on 160 acres on this site. A landman called asking me to sign a Ratification of Oil, Gas & Mineral lease. Think I should have an attorney look at this? What is the process? Can I negotiate a bonus on my rights?

Permalink Reply by jffree1 on March 26, 2010 at 4:52

If you are being asked to sign a ratification of lease it is because you don't have executive rights to negotiate or execute a lease and receive lease bonus. A lawyer could (and probably should) explain it better, for sure, but apparently whoever holds the executive rights has already signed a lease and negotiated bonus, royalty, etc... and you will receive your royalty based on the terms of that lease.

Always ask an attorney if you are not sure what you are being asked to sign. It could be a "forever" contract.

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