Replies to This Discussion

Permalink Reply by arthur jenkins on January 12, 2011 at 6:06

did anyone in your family sign without an attorney. my family was approach in june in louisiana and given leases. we in california had no ideal until Nov. what is forced pooled, and how do we keep our land  from being divided in interest.

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Permalink Reply by The_Baron on January 12, 2011 at 9:00

Your tract will be pooled with surronding tracts ito a production unit. You will share in the production from and with you unit. There is a good deal on this site, just search and strat reading.

 

As to keeping your land from being divided interest, it depends. I can not give specific advice without more info, but it sounds like there are many heirs involved. The interest will be divided as to the laws of succesion,, and depend greatly on if there are wills involved or not. They are not dividing the tract physically(agin I speak generaly without specific knowledge.) but dividing the tract according to what % eac wach family member owns.

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Permalink Reply by True Texan on January 12, 2011 at 5:51

I would take the $7,500 per acre for a three year lease and run with it at a 1/4 % intrest.   Then hope they don't drill within the time frame and you can release the tract.    

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Permalink Reply by The_Baron on January 12, 2011 at 9:01

I would too, except I would hope they drilled on me.

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Permalink Reply by Frank on January 12, 2011 at 13:16

I would too, Baron.  I'm close to retiring.  Texan may be about 25 and willing to hold 'em.

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Permalink Reply by Skip Peel - Mineral Consultant on January 12, 2011 at 13:30

The lease terms offered, as far as described, are appropriate and acceptable.  IMO, they represent a current fair market offer for minerals about to be drilled by an operator that's ready to wrap up leasing.  At this point the terms are of utmost importance and should be the focus.  Flippers don't make offers approaching the ones posted.  And to suggest that the identity of the ultimate party behind the lease offer is a major concern when the mineral tract is already included in a unit and forced pooled, is illogical and paranoid.

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Permalink Reply by Joe Aldridge on January 17, 2011 at 0:35

Skip,

My family and I have been a mineral owners for years. I'm located in the Port Hudson area where Amoco discovered the big Tuscaloosa field in the 70's. And now we have someone looking at the area for Tuscaloosa Marine Shale. We have been leased on and off for years and I don't understand this thing about COST-FREE Royalties. I always thought that royalties were cost free. Is this something new? It seems that if the royalties were not cost free then you would have a working interest in the well. The company I've been told would not want that because that would open them up to a continuous audit situation by the land owners. Thank you for any info on this subject.

 

Joe

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Permalink Reply by Henry on January 17, 2011 at 1:19

Joe,

A cost-free royalty is one in which the operator is not allowed to deduct for things like transportation, marketing, dehydration, compression, treatment, etc.  To date, it appears that the amount of deductions varies greatly among operators.  Some operators deduct very little, while others deduct almost $1 from the price for which the gas is sold.  In other words, in the worst case, you might receive only $3, even though your gas is ultimately sold for $4.  Over the life of a well, these deductions can amount to over $1000/acre. You can protect yourself against these charges with an addendum to your lease that ensures you do not have these deductions taken.  A good O&G attorney can provide such an addendum, which would also contain other protections for you.  It is worth the cost.

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Permalink Reply by Joe Aldridge on January 17, 2011 at 3:34

Thanks Henry,

I'll probably talk to my attorney this morning about another matter and see what he says. He the one that told me about this site. so it'll be interesting to see what he says. Thanks again.

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