Replies to This Discussion

Permalink Reply by Randy on July 4, 2008 at 5:46

It proportionally increases the amount of wells that can have production. 80 acre spacing for instance on 1920 acres lends much more wells than the 8 on a 640 acre unit.

It's a wash in most cases, and better for you if you are the part of the 1920 in a crap area.

Randy

P.s. I don't believe we'll see units of this size regardless, we can't horizontally drill that far and that's the only reason it would be viable. To drill long distances off one wellbore. This may change as technology improves, it would reduce drilling costs considerably and also require less wells, less drilling, etc. Which is better for our environment.

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Permalink Reply by Les Bamburg on July 4, 2008 at 6:23

One thing is the operator of the unit is not obligated to market the carried owner's share of gas production. The operator can use any legal mechanism available to collect the carried owners share of costs including billing, lien on assets, etc. Of course the easiest is to collect from such owner's revenue but that is not the only option. And yes you can be billed for dry holes or remaining balances on wells that don't reach payout status.

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Permalink Reply by James CD1 on July 4, 2008 at 7:20

Thank you Randy. Now all I have to do is get J W Production Co to pay me. They
advised me they don't have to because I did not sign a lease which I told them I
never saw a lease to sign. You would think they would have sent it certified so
they would have a record. But anyways- It is a BIG hassel to get anything from a
Oil co. and I would not EVER want to try it. I have had 3 (Louisiana) lawyers tell
me they do have to pay. Anyone one know a lawyer in this day and time that would
take them on over a small piece of land. But my main reason to try and straighten
this out is--can I lease or(or sell) my minerals to someone else and who would
want them- they have me landlocked in this unit. HELP!! And it is the PRINCIPAL
and I am long on principal. No one should be able to take something from you
and not pay you a FAIR price for it.

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Permalink Reply by insomniacnla on July 5, 2008 at 12:48

James,

Yes there are attorneys out here that will be happy to collect what is owed to you from J & W, you might even find one that will take it on a contingency (percentage of what is collected) basis instead of an hourly rate. It does depend on how much production the well has brought in. More production equals more money. It also will depend on how much land you have in the unit. If you only have 1 acre and the well has only produced very little, then it might cost you more than you will ever receive. A friend of mine in Frierson had the same thing happen, J &W drilled their well, the well only produced very little in the past 10 years, he never was asked to sign a lease. The well is still only producing less than $300.00 per month in production and his 2 acres percentage of the production is only about $1.00 per month. Most everyone else in the unit that did sign a lease are now talking to an attorney about filing suit to have their leases cancelled because the well is not producing in "paying quantities". Their opinion is that "paying quantities" means "paying for the costs to keeping the well producing" and that since the well is not even paying for its own upkeep, then their leases have terminated. If the landowners win their suit, they will be able to negotiate new leases with some of the Haynesville Shale bonus money and higher royalty percentage.

You can also call the Department of Conservation and ask for an audit of the well in your section. I have spoken to their office last year and was told that if a landowner feels as if they are not being paid correctly, or in your case not at all, that office will audit J & W. The best thing of all about involving the Dept. of Conservation is that it will not cost you anything from what they told me.

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Permalink Reply by Snake Stewart on July 5, 2008 at 12:55

I believe I read somewhere I believe it was La. Mineral Code. Part of fine for company is 100 % of royalty payment that wasn't paid.

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Permalink Reply by Bobi Carr ("parker") on July 14, 2008 at 12:16

I am in a similar situation with JW.

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Permalink Reply by RAY on July 5, 2008 at 9:43

There are unleased mineral owners that owe for five or six wells in a unit and will ever see a dime from them as they will never technically reach a point of paying out the interests share of costs plus the penalites.

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Permalink Reply by Les Bamburg on July 5, 2008 at 10:11

Ray, it has been posted several times that there is no "penalty" associated with unleased mineral interest. If you have some evidence that this is not the case it would be helpful.

Payout of wells is very much a function of production rates, natural gas prices and capital cost. If the wells have not reached payout then the operator has not made a profit either.

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Permalink Reply by James CD1 on July 5, 2008 at 12:00

Ray, I don't know if your post was in reply to my plight but just in case.
The unit has only one well on it and it has been paying (not Much lately)
for over 20 yrs. I would think they would have paid for the cost of the well by now. I think they are just Paying enough to hold by production.
Since they won't pay, any advice about seeing if JW or anyone would buy
the minerals.

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Permalink Reply by Rocker on July 8, 2008 at 3:27

This Discussion needs to be kept in play.

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Permalink Reply by RAY on July 13, 2008 at 17:06

Its been awhile now and people are more on top of the Haynesville play.

any new points to make on this subject ?

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Permalink Reply by Snake Stewart on July 13, 2008 at 18:16

If these guy's will step up and pay landowners what the parish is getting this might disappear completly. $30,000 one year lease with $15,000 rental after year one with 30 % royalty.They could save themselves a lot of trouble.

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