Replies to This Discussion

Permalink Reply by Mac Davis on October 3, 2010 at 17:53

FXEF, why do you say "get legal advice?"

If her land is all in S6-T22N-R5W, doesn't it look like there is no existing well she's be due payments for?

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Permalink Reply by FXEF on October 4, 2010 at 4:27

Mac,

Maybe I should have used "professional" instead of "legal." It appears to me, from her post, that she does not have a clear understanding of what she owns or where it is located. You are correct, there is not a producing well in S6-T22N-R5W, however she did ask about timber in her original post. With 94 acres, she could have a sizable amount of timber. She needs to have a timber cruise run.

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Permalink Reply by Mac Davis on October 4, 2010 at 13:37

Agreed, if she's not sure whether all her land is in S6-T22N-R5W, she should find out for sure.

Then there's some possibility that there's something relevant to her land we're not seeing in SONRIS, but I doubt it.

The point on timber is a good point too. I've heard that timber prices are low right now, and that, in particular, large trees may be difficult to sell due to many of the sawmills not being equipped to handle large logs. If you sit on the timber too long, you may find you can't sell it once the trees get too big. On the other hand, you may want to wait for higher prices.

Does anyone have any idea what pine timber is worth per acre? I know price varies wildly depending on the tree size, quantity, quality, location, etc.

Karen,

Are these two disconnected parcels of land?

Also, you said,

"According to my papers, this is what it says:Southwest Quarter of northeast quarter (sw1/2 of ne1/4) and south ten acres of nw 1/4 of ne1/4 of section 6, township 22 north, range 5 west, xontaing 50 acres"

Does it really say "(sw1/2 of ne1/4)". "sw1/2" doesn't make much sense. "sw 1/4" would make more sense.

The description of "4 acres in nw corner of the sw1/4 described as starting at sw corner of lot sold by will meadors to Mt. Sinai Scool and run South 140 yards, east 138 yards, north 140 yards then west to starting point, section 6 township 22 north, range 5 west, containg 44 acres" gives me a headache. Unfortunately, land descriptions are often done this way.

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Permalink Reply by Mac Davis on October 4, 2010 at 15:17

Does your property look something like this? The description is a little hard to decipher not knowing about Will Meadors.

Mt. Sinai Rd. runs north/south through the upper blue land track.

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Permalink Reply by Skip Peel - Mineral Consultant on October 4, 2010 at 15:23

Reviewing production or lack thereof in Section 6 - 22N - 5W on SONRIS Lite is insufficient to determine whether existing production holds a lease in force regarding that section. The property description contained in the lease is required along with the inclusion or lack of a horizontal Pugh Clause to determine whether these mineral are held under an old lease.

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Permalink Reply by Mac Davis on October 4, 2010 at 19:18

Skip, are you pointing out that she may not own the mineral rights even though there's no production in that section? I agree that's possible. Who knows, maybe the state owned the land at some time and kept the mineral rights forever. That's true for almost every landowner in the whole state.

More importantly, it seems unlikely that there's any existing production that would pay her royalties for the land she has. i.e. there's unlikely to be a pot of money waiting around for her to claim until some more wells are drilled in the area.

I don't see any reason for her to worry about old leases until there's some drilling or leasing activity in the area. Do you see any reason for her to pay someone go searching records now?

For that matter, is there really any reason for anyone to go searching for old leases, etc. until some landman or operator tells you that they don't have to pay you because you don't own the mineral rights?

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Permalink Reply by Skip Peel - Mineral Consultant on October 5, 2010 at 1:48

Mac, I'm pointing out that old leases more often than not lack horizontal Pugh clauses. Without such a clause a lease may hold a tract in a section through production in an adjoining section even though the drilling unit does not include the portion of the tract lying in the first section. A horizontal Pugh states that any portion of land under a lease not included in a producing unit must be released from that lease upon expiration of the primary term. The laymen members get too focused on Haynesville Units based on sections. Many older formations have much lower well spacing. There may be multiple wells in a unit covering only a quarter section for example. There are formations where units are 320 acres. An some that are ~640 acres that are formed from halves of adjoining sections. Questions regarding the leased status of a tract lacking a release from the lessee should be performed by a qualified professional. This is one of the first widely learned lessons in this Play and is a prominent part of Haynesville: The Movie.

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Permalink Reply by Mac Davis on October 5, 2010 at 10:15

I think I agree with you, Skip, but let's be clear. Aren't you pointing out that she may not own the mineral rights anyway?

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Permalink Reply by Skip Peel - Mineral Consultant on October 5, 2010 at 10:32

No. My comment is about assuming a section is not HBP simply because there is no producing well located there.

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Permalink Reply by Karen Jones on October 5, 2010 at 11:00

Hi again,

I dug up some more papers. My sister-inlaw sent me a copy of an old lease from July 1980 that says Township 22 north Range 5 West Section 6 SW1/4 of NE1/4 and south 10 acres of NW1/4 of NE1/4 comprising of 50 acres

and Probate copies saying SW1/4 of SW1/4 of section 6, and 4 acres in NW corner of the SW1/4 of SE1/4 described as starting at SW corner of lot sold by Will Meadors to Mt. Sinai School and run South 140 yards, then west to starting point, section 6, township 22 north, range 5 west, containing 44 acres.


Does that make any sense to anyone?

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Permalink Reply by Skip Peel - Mineral Consultant on October 5, 2010 at 11:19

Karen, perhaps this will help.

http://www.gohaynesvilleshale.com/photo/2117179:Photo:119678?contex...

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Permalink Reply by Mac Davis on October 5, 2010 at 14:51

No. My comment is about assuming a section is not HBP simply because there is no producing well located there.

You're right, Skip, but one possible consequence of the land being HBP (Held By Production) is that she might not own the mineral rights. Someone who owned the land before her could have retained or sold the mineral rights before the land was transferred.

Another possibility of being HBP would be that she owns the mineral rights, but they're already leased. If someone did drill her minerals, she wouldn't get a bonus, but might get royalties from the old lease.

Am I correct on the above comments? Doesn't the possibility of being HBP on an old lease work against Karen in these cases?

Since her land does not appear to be in the unit of the Bruckner RA SU B well in S1-T22N-R6W, it seems to me that she's unlikely to be due any royalties for that well.

Everything I see sounds like Karen is unlikely to be owed any money on any existing wells. She could hire someone to research all this, but it doesn't sound likely from what she has told us that she gets any good news out of it, unless she has some other land or mineral rights she hasn't told us about.

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