Replies to This Discussion

Permalink Reply by Henry on June 24, 2010 at 0:12

Steve,
I believe that 6-8-10 has been unitized by SWEPI. From traffic on this site, many people in Sabine Parish seem to be getting $6000 easily these days. If your mother has a large tract, she may be able to get more. However, prices can change in six months (gas prices are rising...). Read this site, check with neighbors, go to the courthouse, get a good lawyer -- make sure you know what prices are before you sign a lease.

In any event, do your homework and know before you begin negotiations what other features you want in a lease. Read the sample "Exhibit A" documents on this site, and see what is important for you. Make them part of the negotiating process. Most people will tell you to insist on the following as a minimum:
- cost-free royalties
- vertical and horizontal pugh clauses
- lessor does not warranty title
- lessee must notify lessor of any/all transfers of the lease
- shut-in penalties of more than $1 per acre per year

There are other features that may mean a lot to you, and you need to include them. They might include:
- no surface use by the lessee
- lessee must shut all gates, or the penalty is....
- explicit penalties for contamination of land or water
- etc.

Think of what is important to your mother, and get it in the lease. Otherwise, you will never get it. But also be reasonable.

Permalink Reply by Shaleeee on June 24, 2010 at 1:41

Steve, you should print out the info Henry gave you in his reply - he summed up some of the most important items in a lease and the last paragraph is very important.

Permalink Reply by Jack Blake on June 24, 2010 at 1:48

Jack says excellent post Henry! Short and to the point.

When Jack did his lease he got some of those things. He would have done even better had he known then what he knows now. Jack Blake went to studying like crazy back in the leasing frenzy, but it took a long time for things to sink into Jack's thick skull. Your post is so good for novices that Jack Blake must shout it out (Jack copied and pasted and bolded and made it red, but when he went to put it back on GHS it did not stay huge and red):

In any event, do your homework and know before you begin negotiations what other features you want in a lease. Read the sample "Exhibit A" documents on this site, and see what is important for you. Make them part of the negotiating process. Most people will tell you to insist on the following as a minimum:
- cost-free royalties
- vertical and horizontal pugh clauses
- lessor does not warranty title
- lessee must notify lessor of any/all transfers of the lease
- shut-in penalties of more than $1 per acre per year

There are other features that may mean a lot to you, and you need to include them. They might include:
- no surface use by the lessee
- lessee must shut all gates, or the penalty is....
- explicit penalties for contamination of land or water
- etc.

Think of what is important to your mother, and get it in the lease. Otherwise, you will never get it. But also be reasonable.

NOVICES RE READ AND UNDERSTAND WHAT HENRY WROTE. IT WILL HELP YOU SO MUCH CRIED JACK BLAKE!!!!!!!!!!!!!!
OUTSTANDING LEASE TERMS FOR ALL WAS THE RALLYING CRY OF THE DAY HOWLED JACK BLAKE!!!!!!!!!!!!!!!!!!!!

Permalink Reply by Steve McFarland on June 24, 2010 at 8:19

Henry,

Thank you so much for sharing this information with me.

Steve

Permalink Reply by Henry on June 24, 2010 at 12:35

Steve,
You are very welcome. My last piece of advice is to make sure a good o&g lawyer, with Haynesville Shale experience, helps you. If I can help with anything else, feel free to ask.