Replies to This Discussion

Permalink Reply by North LA on July 9, 2011 at 3:28

Here's the well file if anyone is interested.

 

http://ucmwww.dnr.state.la.us/ucmsearch/UCMRedir.aspx?url=http%3a%2...

Permalink Reply by Herman (Chuck) Plonnigs, III on July 9, 2011 at 10:09

 

Thanks North LA,

 

Re/item #3…does this mean all property owners who have not agreed to a lease at this point will either be force pooled or be given the option to sign a “market lease”?

 

If this is the case the only conclusion I can draw is that in NELA the landowner has absolutely no grounds at all for the negotiation that is extremely prevalent in NWLA.

 

However, should this well have a good showing could this impact market values of leases in Union Parish w/re to up front bonus and percentage of royalties?

 

Thank everyone for their patience!

Permalink Reply by North LA on July 10, 2011 at 3:19

"If this is the case the only conclusion I can draw is that in NELA the landowner has absolutely no grounds at all for the negotiation that is extremely prevalent in NWLA."

 

Chuck,

 

The same laws apply all over the state. When the O&G companies decide to drill they have to force pool those who aren't leased. That holds all over the state. Those who don't sign are then recognized as unleasead mineral owners. You will have to ask an O&G lawyer any more specific questions because I don't want to confuse you or myself.

 

"However, should this well have a good showing could this impact market values of leases in Union Parish w/re to up front bonus and percentage of royalties?"

 

I would say most definitely but the catch is that I doubt the operator will release the data one way or the other. That is unless they feel like they have enough acreage leased and want to attract a JV who is willing to buy in for a billion or two. Short answer is we'll have to wait and see but it's still exciting.

 

Permalink Reply by The_Baron on July 14, 2011 at 10:02

Herman,

 

In LA we do not have a "market lease" like other states (like AR, MS do)

 

If an unleased interest is in the unit, they are pooled into the unit and may be given a choice to participate as a WI or go non-consent. If they opt for non-consent, they pay nothing upfront. If the well is a dry hole, they pay nothing. If it is a producer, their pro-rate share of production is theirs, but well costs and operating expenses  are deducted first.  So, the non-consent gets no $$$, until after payout.

 

A leased interest is similar, but gets hit with a 200% penalty in they go non-consent.

Permalink Reply by Herman (Chuck) Plonnigs, III on July 14, 2011 at 11:55

Thanks guy’s…I think I am learning this stuff…but keep in mind this is my 4^th Monday this week!!

 

My question is how can a leased interest go non-consent?

Permalink Reply by The_Baron on July 20, 2011 at 3:12

In Louisiana....

 

A unit operator force pools all leased an unleased interests.

 

The operator will normally contact the lease holder and propose under LA RS 30:10 that the lease holder participate. If the lease holder refuses, i.e. goes non-consent, they will be assessed all unit well costs, and an additional 200% penalty. All to paid from production. They owe nothing if there is a dry hole (although with a 200% penalty, they probally won't see much if its even a great producer, at least not for a long time).