Replies to This Discussion

Permalink Reply by M. Mcwilliams on July 4, 2008 at 4:59

Actually, it's 2 acres, but granted, that's small in the scheme of things.

Permalink Reply by DrWAVeSport Cd1 on July 4, 2008 at 5:23

"Can we all agree, that even though everyone can see deductions. That with an un-leased interest the O&G company will have free reign to charge all kinds of deductions?"

Randy, one question: What stops O&Gs from having free reign "to charge all kinds of deductions" in any case?

A friend who has spoken with me...O&Gs have every trick up their collective sleeve you can think of...the nature of the so called beast: business practices. My friend has been dealing/and been in this business for over 50 years in NWLa. A multi-millionaire who has weathered all the O&G stuff around this area and survived quite handsomely. I wish he could tell you some stories! The lessor, the unleased mineral owner...it does not matter...isn't getting into their "bookkeeping." The lessor, or the unleased mineral owner, isn't ever going to see exactly how much comes out of the ground...or how much it exactly costs to produce...or any real #'s so to speak. That's all done with spreadsheets and accounting models that can blow one's mind. And it is amazing how fast #s can change on a computer accounting model. (i.e., look @ Enron and their employees who got left holding nothing but...actually...nothing)

I know, not exactly the same thing, and slightly scary to suggest. However, it happens. I feel like lessors need to get the best "insurance policy"they can before signing, that's all.

Everyone, that way, gets to have their cake and eat it too! (Too cliche, uh?)

Great debate!

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Permalink Reply by Randy on July 4, 2008 at 5:27

Leases are negotiable, un-leased interests only power is to go through all the computer accounting and decipher it and understand it.

I'm sorry I don't have a list of operating expenses that are charged to a un-leased interest vs. a lessor. I know "take my word on it" won't work here, but as an un-leased interest you will be charged many more deductions than the alternative.

Randy

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Permalink Reply by david on July 5, 2008 at 7:16

I have been told by an owner of an exploration company that there is no chance you could get the most favored nation clause into a lease. The guy who told me that is a friend, and is not involved in the Haynesville Shale. Maye this situation is different, but it doesnt seem plausable!

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Permalink Reply by Snake Stewart on July 5, 2008 at 11:01

Just asking for a F/N clause can be a powerful tool all by itself ! If for instance this gentleman is trying to get me to sign a lease.He promises me that this is absolutely the most money going to be paid in this area. That being the case , he should have no reason not to grant F/N clause ! If that is top pay, then agree to F/N. If he will not , after telling you this is top dollar, tell him to get his fib telling carcass out of your house until he can come up with top pay!

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Permalink Reply by RAY on July 25, 2008 at 13:10

has anyone been able to get a FN clause attached to their contracts?

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