Replies to This Discussion

Permalink Reply by jffree1 on September 1, 2010 at 14:13

Gary, that area has XTO permitting and drilling 2 miles to the west, northwest and southwest. Southwestern is Northeast, East and Southeast about the same distance and they, too, are drilling. Take your time and get the best deal you can, with emphasis on 25% royalty. That area has not been proved yet (no wells completed in the Haynesville) but there is a good deal of interest. You may not get another chance at a do-over, once you sign a lease, so make sure you can live with the terms you agree to.

Permalink Reply by Cary Jerome Marston Huff on September 2, 2010 at 5:44

In 2005, SWN/ SEECO/ Desoto came into Arkansas first to drill into the Fayetteville Shale. Even though average mineral royalties at the time were 3/16th, Southwestern gave the unsuspecting Mineral owners 25.00 an acre and 1/8th mineral interest. They done this until most of the state was leased. Southwestern is the low lease landman company. Wait it out as long as you can. Take different bids. Know your rights and know what you can have them do in your contracts. Do not take a blank contract. Some companies will agree not to drill on your land. If you wait to the end and get integrated you can demand the highest of the leases. Or if you sign you can demand the highest mineral interest in your section. I had Southwestern. With my neighbor as witness, one of their landman Perry Brown negotiated a lease for SEECO/ SWN, I had him guarantee my name would never be used after lease was signed, I would get the highest mineral interest possible, there would be no middleman between me and SEECO, and to not allow this lease affect my retirement. Perry Brown said he needed to talk to his lawyer. Perry Brown came back the next day and said the lawyer said it was all okay. Writing was so small I couldn't read it. I asked Perry Brown if all the things we agreed to were in the document. He said they were. I asked are you sure - he said yes. I said said are you positive, he said yes. I signed that contract. Later on I found my glasses. Not one of the things agreed to for SEECO by Perry Brown was in that contract. If the Landman's name is Perry Brown do not lease with him. When you do lease find your glasses and read everything to the letter Z, and make the clause have to make 'As Was' in your contract, Do not authorize injection wells, or land fills. SWN/ SEECO mineral Leases have all that stuff in it. Also add 'contaract cannot be utilized or transferred to another producer without mineral owners permission/ authority. goodluck!

Permalink Reply by Phillip Briggs on September 8, 2010 at 9:04

Leases in Texas are public records.... exactly how could a landman (or anyone) guarantee your name would not be known? [Public records are open to everyone... and Shelby County's records are all online].

I'm also unclear on what's meant by "to not allow this lease affect my retirement". Either you wanted the lease money to be paid in untraceable cash (to avoid the IRS, [which I can wholeheartedly agree with]) or you really didn't want a well drilled (which landmen have zero control over)... because the only way it wouldn't affect your retirement would be for the well to not be drilled. If it were drilled, you'd definitely have more money coming in.

Whenever a person is dealing with money, trust but verify... get your own lawyer. Depending on others, when it comes to financial matters, is an iffy proposition. Would be like you giving a convict your credit card, as long as they promise, cross their heart, not to ever abuse it.

Permalink Reply by MARG on September 2, 2010 at 6:45

That is a BAD DEAL; going rate is much more for bonus and not good percentage (ask for 25%) and much more bonus. I do not know exactly where that is, but I have an idea, and I think it is not far from FM 139. See who else is leasing near you and be aggressive and contact them. Tell SWE what others in the general area are getting. Have a lawyer or someone who knows the O & G business negotiate for you. You will be stuck with this lease" unless they let it run out and then you can release. Also, watch for the options they have on it. Leasing is very SERIOUS for you, your dependents , and your heirs. I am a third generation mineral owner so I am well aware of the importance of TCB.

Permalink Reply by BillyBob on September 2, 2010 at 6:57

How do I find out who is leasing in my area and how much they offer? This is my first rodeo but I believe it won't be my last. All information is most helpful and highly appreciated.

Permalink Reply by DJG on September 2, 2010 at 7:09

Are you in Shelby County? Which survey name and abstract number?

Permalink Reply by BillyBob on September 2, 2010 at 9:12

My land is in the T.R. Goodwin (A-256) and James Rowe (A-585) surveys.

Permalink Reply by True Texan on September 6, 2010 at 14:28

I have signed many oil and gas leases. Only one time did I meet with the landman. It was over a large trac and the guy met with us twice. We had lunch both time. The second time we meet we signed the lease and got cashier checks in our hands. Most of the time the leases come in the mail with a bank draft. Once you sign it you go to the bank and do some paper work. Then once the company has the lease in their hands they deposite the money into your bank account. It takes about two to three weeks on the norm. I guess I'm not to worry about what is going to happen to the tract of land because I only own what is below. The company under texas law has to make sure they do everything right for the top land owner. As I understand by signing a lease you are better off then being opted out. You have to understand that these landmen are at the court house most of the time. Once they get you to agree with the term then they turn things over to a person with in the leasing oil company. They have to then check the landmans work to make sure you are the owner and they are getting a lease from the right person. The landman then gets paid once you sign and get paid yourself. If you have a small trac of land and the value of his offering is low it would be a wast of his time to come and see you. I can understand that fully. By reading some of you peoples post I think you are worrying about it to much. Most of the time they are not going to drill your lease anyway. Out of all of the leases I have signed I have about 12 wells that are pumping. I can tell you that the real money is in the lease signing bounes in my case. They sign give me the money, I wait three years and then ask for the release of lease papers to be filed at the court house and then someone else shows up to lease it again. Most of my tract I keep under lease just by the landmen contacting me. I notice that the Haynes Ville Shale play is cutting back. A lot of these companies are now over in West Texas trying to look up leases within the EgleFord Play. It seams like it's going to be hot because the last lease offer I got was from there was for $2,500 per acre.

Permalink Reply by Cary Jerome Marston Huff on September 8, 2010 at 16:22

My wife and I are both 100% disabled veterans. I was worried that someday the laws would change and Veteran's Disability would someday be affected. Our land and minerals are jointly titled 'and/ or'. I was promised my wife's name would only be used. 8 of the 9 lease contracts that we have signed are signed by my wife. There is a pattern. Taxes would be paid through my wife. All is needed is one tax I.D. number.

Permalink Reply by BillyBob on October 13, 2010 at 16:00

Landman contacted me again and said they had the lease about 80% done. He asked me what I wanted and I told him 2500 and 25%. He aid he could go 1000 and 25%. His original offer was 700/20. What do ya'll think? He said I could get left out on the bonus and only get the production or something like that if I didn't get on board.

Permalink Reply by adubu on October 13, 2010 at 17:01

if you get 25%r and excellent other terms with all the important pugh clauses of vertical, horizontal, royalty free gas,etc,etc and let a good oil & gas attorney write it then I would take it for your good money is in the ground---IMO

Permalink Reply by DJG on October 13, 2010 at 17:27

Did they give you any indication as to when they plan to start drilling?

Perhaps try to limit the deal to two years only with no extension. Also try and negotiate a continuous drilling obligation (1 well every 2 years? 3 years?) as that will help protect you from getting your land locked up for decades with only 1 well drilled and no additional in-fill production. Also the standard clauses mentioned by Adubu above. Although the extra bonus $$$ would be nice, if they've come up to 25% and can meet you on including all of the protection clauses and requirements that you want added to the deal in the end it is those clauses that you will be living with for decades long after all the bonus money is long gone spent.

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