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Permalink Reply by Brenton Spence on July 12, 2008 at 7:21

Our lawyer stated that the only way we could make a legitimate demand request on the deeper rights was if there was evidence of drainage from an offsetting well, unless it had a Pugh Clause restricting holding the deeper formations after the end of the lease's original term. Our leases don't have any clauses in it that would automatically require a release.

He also said that if we requested development or release under a potential offset drainage situation, the O&G company would be given reasonable time to contest or respond to the request with an actual well due to reasonable time to get a rig on site and start drilling. IF the land is in a good spot, then it's likely that the O&G company will not allow the lease to expire, but will cut a deal with a bigger company (if they haven't already done so) to get it drilled before a court would rule to take it away from them. If one of the bigger companies has already bought the lease, then they'll make sure that they protect the lease against any valid claims of offset drainage by drilling a well soon.......the silver lining in this is that if drilling does come within 1 mile of our acreage, then we'll probably get a well drilled soon if it's a decent well, and at least get our royalties, which should make up for losing out on any upfront dollars under a new lease.

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Permalink Reply by william Stayton on July 10, 2008 at 0:08

All HBP is not bad sometimes bird in hand & bird in bush results in good royalties $$$$ for last 30 yrs. plus just maybe greater $$$$ for next 30 yrs,

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Permalink Reply by Bobi Carr ("parker") on July 10, 2008 at 4:46

I would love to be HBP on property that I have sold and reserved the mineral rights on. Several piece are within a few years of prescribing to the surface owner. I hope they drill soon, even though the royalty is only 1/6th.

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Permalink Reply by cavalier333 on July 10, 2008 at 3:02

Thanks everyone for your responses so far...

I asked the question due to some posts I read in the "Lease $$$ so far..." thread regarding the Greenwood/Waskom area. It seems that there is a concern that this area is largely HBP, and that as a result the big Haynesville players would not be interested (or able) to drill there.

My family has some acreage there (already leased) and I am simply trying to get a handle on whether it will ever be drilled, or whether the fact that surrounding acreage could be HBP by small players would complicate things indefinitely.

It does seem that Greenwood/Waskom is in a good Haynesville prospective spot, so hopefully all of the landowners in the area will benefit from royalties, even if HBP keeps them out of the bonus $$.

Keeping fingers crossed...

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Permalink Reply by Johnyd on July 10, 2008 at 8:10

Real good Friend of mine has 120 acres in the Barnett just north of FT Worth. He has been under lease for 20 years with one well on his land. The well is not even paying the Taxes on the land that he owns. They have drilled all of the recent leased land around him with (ONE Deep Well) They have not touch his property, nor any other in that section all though they did buy the lease from the existing company and yes the original terms were held. The O&G Companys pay all this money for those leases and they are going to drill them first before they come and drill on the land that they hold production on already. Also he said that once they discovered the Fayetville shale they packed most of the rigs up and went there to start drilling on those sections before there leases were up. He said that they told him it maybe years before they come back and drill on his land or drill a second well on some of these productive sections That could handle Multiple Well heads because of the demand to hold new leases in new Discoveries. Makes since, if you notice they discovered the Field In OK First, Then the Barnett, Then the Fayetville now the Haynsville. Dont think they just found out about this shale a couple of years ago....they knew....just like they know where the next one will be at! I bet you there leasing there right now for PENUTS.

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Permalink Reply by Jack B2 on July 10, 2008 at 15:37

It's may be the area of the interior Mississippi Interior Salt Dome Basin.

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Permalink Reply by Bobi Carr ("parker") on July 13, 2008 at 6:09

Would you mind explaining this?

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Permalink Reply by herman on July 10, 2008 at 9:59

Some of the land in the Greenwood/Waskom field is held by a company by the name of WoodBine(spell?). Is anyone familier with this company and know if they are having any dealings with the big players.

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Permalink Reply by Robert Griffin R on July 11, 2008 at 3:15

How is this for a twist! A shallow well was drilled in my section 11 years ago and royalties have been paid to "some" landowners in the section but not all. Our property had "never" been leased to anyone for anything since 1949, our family was never notifed of the existence of the well and we have never been paid any royalties. I signed a 3-year, $250/acre lease in 2005 that expires this month. Does the fact that an oil and gas company executes a lease while there is a producing well in the section mean that the driller/operator of that well has no claim or hold on the landowners' mineral rights in that section? ???????

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Permalink Reply by Les Bamburg on July 11, 2008 at 3:23

RG, you have to see if the size of the unit for the shallow well. Units are not always 640 acres and can be much smaller for oil wells and/or shallow production. This is what determines which acreage receives royalty payments and participates in the well.

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Permalink Reply by Vonda on July 13, 2008 at 12:47

I pray that you are right about not sneezing at the royalties about leases held by production. That is exactly what I am facing. my 102 acres is "held by production" with a 45 year old lease with 12% royalties. Pitiful isn't it

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