Replies to This Discussion

Permalink Reply by Henry on December 29, 2010 at 3:25

Based on my survey -- make sure you get "cost-free royalties!"  Depending on the company that you lease with, you can suffer huge losses if you don't have such a clause.

 

Note:  Ben Elmore just wrote some useful info for Texans on this issue.  If your land is in Texas, search under Ben's postings.  If you live in Louisiana, get an attorney to help you get these words right.

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Permalink Reply by Ben Elmore on December 29, 2010 at 3:34

You can use the Eagle Ford leasing bonuses, royalty %, etc. as a model, as leasing activity continues in that area and you have some of the same players.  Of course, Eagle Ford has a wet gas and oil window, so companies may not pay as much for Haynesville given gas prices.  But I think everyone on this site should get on the same page so that there is more of a united front from the royalty owner side. 

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Permalink Reply by benny688 on December 30, 2010 at 14:02

I have several leases with Petrohawk in Harrison County that are set to expire the end of April.

 

I guess Petrohawk should be contacting me about this shortly if they want to work a deal to renew?

 

I plan on turning this over to an attorney to keep them from having me tied up for a long period of time.

 

GLTA

 

 

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Permalink Reply by Skip Peel - Mineral Consultant on December 30, 2010 at 16:37

Don't be surprised if the Hawk allows your lease to expire.  Just send them a certified letter requesting a release for filing with the county clerk.  Then wait to see if any other companies are willing to make lease offers.

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Permalink Reply by benny688 on December 30, 2010 at 17:50

Thanks, Skip

 

I guess it seems rather strange to me that HK would let this expire after paying those bonuses during the peak, but after looking at their last financial statement this evening this probably explains it all.

 

I'm not uptight over this, but look forward to the possibility to start working with a company like Devon again where this doesn't seem so nutty and they pay on time.

 

GLTA

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Permalink Reply by Mac Davis on December 30, 2010 at 19:54

Unless they have a mandatory renewal clause in the original lease, it doesn't matter what they payed for the lease last time.  That money is gone.  The financial impact of renewing a lease is the same as buying a new lease.

 

They may have some "emotional" reasons or "cook the books" reasons to renew the leases and pretend they didn't "waste" the original lease money.  Or they may hope that some of the lessors will be dumb enough to renew the lease at a lower price than they would get for a new lease.  I guess there could also be some sort of tax advantages.  Or there might be some financial agreements that trigger some unfavorable consequences if they lose the lease vs. renewing it.

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