Replies to This Discussion

Permalink Reply by Aubrey C. Sanders, Jr. on April 8, 2010 at 18:09

You don't have to sign lease. Personally, I would not unless they would tell me name of company. Seems to me that offeris marginally acceptable if for a term of 3 years or less.

Permalink Reply by Aubrey C. Sanders, Jr. on April 14, 2010 at 15:35

JT,

Well said. One thing every landowner needs to know if he has no experience in leasing. Never rush into signing a lease until you discuss lease thoroughly with knowledgeable persons, and one of them should be competent, honest lawyer. All sorts of PUGH clauses can be negotiated which may help protect your interests. One that comes to mind is a "most favored nation" clause. That can help level playing field. Personally, I would never lease for more than 3 years without any option. But, I never lease my land anyway.

About 10 years ago I got involved with one very large oil company in obtaining leases for my neighbors. This company is among the 5 largest in the world. I developed good rapport with them and assisted in leasing about 15,000 acres. Every landowner got better lease terms than they or their parents ever had. This company treated every owner the same as they valued their reputation.They even went back and increased bonus and royalty for some neighbors who had agreed to lesser terms prior to my involvement. I have the utmost respect to this day for that company even though they sold their interests in my area.

Permalink Reply by Allen67 on April 14, 2010 at 16:35

Dan, didnt mean to offend you about your land man title, but, most, not all, landmen are just like carsalesmen. Just think about it. If you take your car to trade it in , with certainty, the carsalesman will inform you that trade values are extremely high, except for your car! Nobody really wants your car! But the carsalesman will gladly take it off your hands for a lesser price, of course! Does this sound familiar to you? You believe I am calling you names? no, I am just noticing the familiar traits involved! The majority of people on this site are here for the sole purpose of not remaining ignorant to the oil and gas business. This is a good thing for everyone involved except the ones who are trying to take advantage of ignorance. I see that you have not put anything on here as to how to go about a fair leasing agreement for the landowner. Please explain to us what should or should not be in a lease. Electro, you know how I feel, and all I can say is WELL SPOKEN!!

Permalink Reply by RAZORBACK on April 15, 2010 at 7:40

Well, another lease offer. TRIAD, $200/ac, 3/16 r, 4 years with 4 year option in 19S-19W. Same as the Pinebelt offer. Per landman the terms are fixed and he has no latitiude to bargin. This is the second time I have been contacted within the last 6 months to lease mineral and royalty interest in South Arkansas. Any news on lease activity in Columbia county? Would appreciate any comments.

Permalink Reply by RAZORBACK on April 15, 2010 at 9:24

TURK,
THANKS FOR THE INPUT.

Permalink Reply by D. L. Peace on September 10, 2010 at 0:49

Did you find a local lawyer to look at the leasing contract? Is there someone you used and would recommend? Just wondering if Triad worked with you on changes to the lease contract that a lawyer might recommend.

Permalink Reply by Mark on April 28, 2010 at 5:00

the Columbia sounty court house is full of landmen. I do not know the play.

Permalink Reply by RAZORBACK on May 22, 2010 at 5:14

Any current news of landmen activity in Columbia County? Has anyone been made offers to lease in Columbia County in the last month or so? If so would like to know terms of the offer. Any info would be appreciated as I expect to be approached soon with an offer.

Permalink Reply by George Lutz on May 20, 2010 at 4:55

I am unsure what the rate will be in your area or "what the market will bear" at this time, (my mineral rights are just outside of Clinton, AR and were leased 3 years ago), but an advisor told me I needed to pursue a lease that provided a "gross" percentage of the wellhead rather than the "net" rate they usually offer. From what I understand, it makes a huge financial difference.

Good Luck

Permalink Reply by Polly Ann Foote on February 27, 2011 at 3:40

Triad and Pine Belt have begun filing their leases in the Courthouse. They are filing both leases and Memorandums to lease. Most of the leases Triad has filed contain no changes to their standard form. The only changes I noticed were for 19% instead of 3/16ths and there were only a couple of these. There may be more as more leases are filed. There was an interesting Triad memorandum. Lessor is leasing 45.11 acres and the PRIMARY TERM is 3 YEARS plus it is a memorandum so he obviously obtained additional favorable terms Triad does not want public. Pine Belt is also filing both leases and memorandums to lease. A large number of their leases provide for a 20% royalty. There are some, however, that provide for 17.5%. Pine Belt has 2 lease forms I have noticed. One is particularly onerous to Lessor. It provides for the leasing of all minerals, lignite, lignite gas, non hydrocarbons, etc, the use of the land for storage (!) of carbon and water including salt water, and the continued use of the surface even if they release the minerals or horizon. These particular leases had most of that stricken. Deltic signed a memorandum to lease with Pine Belt.

The Pine Belt memorandum states that there are only two copies of the actual lease, Lessor has one and lessee has one. It seems to me that this is not a prudent practice. These leases are going to be assigned, perhaps multiple times and the chance some may be lost or misplaced seems likely.

Permalink Reply by Joe Deerhunter on February 27, 2011 at 18:15

Hi Polly,

Very interesting, I have an improved offer from Triad on land in Columbia Co too.   They did come up a bit as they discovered more interests we owned, so changing mineral amounts may have something to do with it.  I wonder what effect the middleast revolutions will have on our bargaining position, what with oil going up to $100/barrel or more.  Now, I have heard from one neighbor that he got $300/A for 3 years and 1/4 royalty; however he was vague about when that happened.  I haven't seen those terms born out much in the discussions here. 

Anyhow, I'd be interested in talking to you when I'm in the neighborhood in March.

 

Permalink Reply by Polly Ann Foote on February 28, 2011 at 0:02

Hi Joe
I forgot to add that two of the lessors in the Pine Belt leases stipulated that they were to be paid the same 20% royalty for sulfur produced in conjunction with the oil and gas. (That $1 per ton for sulfur in leases is a boon for lessee.)
Also Atlanta Oil Company has a number of leases which it has assigned to Stephens Production Company in Ft. Smith Arkansas. In that assignment there is the following statement: "Assignor herein reserves an overriding royalty based on the difference of existing lease burden and any present overriding royalty burden and twenty percent (20%) ....Should any lease have a royalty of twenty percent or greater, no overriding royalty is herein reserved." Sounds like they were paid based on the royalty they granted in the leases they executed. I wonder if Triad has some similar arrangement. Their last offer to us was 19.25% . That assignment also provides that "said interest shall be free and clear of all costs of production associated with the production of oil and/or gas from said lands, with the exception of unaffiliated third party charges paid on gas produced and sold that Assignee is required to pay on its own production."

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