Replies to This Discussion

Permalink Reply by Johnson on July 14, 2008 at 5:42

What are people thinking these days......

If I can't get "X" amount in a bonus, and "Y" amount in royalties then I'll just take the 100% royalties....

I'd say X=20K and Y=.25

• ▶ Reply

Permalink Reply by Rocker on July 14, 2008 at 7:41

The bonus and the 25% THAT'S JUST THE CARROT DANGLING OVER THE RABBIT. If you have acreage in a good area and you are pretty sure there will be 1 to 8 wells drilled in the next couple years, I would recommend keeping your 100% and not selling out for 25%. If you live in the city with 0.5 acrea or less and you are sure that no well will ever be drilled - take the bonus. Everyone should watch Rick Rowes show on the Barnett shale.

• ▶ Reply

Permalink Reply by Cillian on July 18, 2008 at 12:57

That's decent reasoning, but from what I've seen, Rick wouldn't know a shale from a hole in the ground. So surely you didn't get that info from "his show"?

• ▶ Reply

Permalink Reply by Les Bamburg on July 14, 2008 at 8:34

Just to clarify, it is not 100% royalty but rather 100% of production less capital and operating cost. Also, there may not be an obligation for the operator to market your share of gas production.

• ▶ Reply

Permalink Reply by Dave on July 14, 2008 at 8:31

Because the operator needs to at least recover the cost of drilling the well. 25% is good unless you have about 8 million$ of your own money to pay for drilling the well. If you want 100%, then you must pay 100%.

• ▶ Reply

Permalink Reply by Johnson on July 14, 2008 at 8:45

Correct...I should have said 100% minus costs.

• ▶ Reply

Permalink Reply by Greedy Landowner on July 14, 2008 at 14:27

Does anyone have any actual experience with opting to "buy in" rather than lease? I'm curious because I am currently researching that option.

• ▶ Reply

Permalink Reply by steven poe on July 14, 2008 at 14:45

When you do not sign a lease you have to wait till the well pays itself off at least 100% percent, then after that you have to help pay the bills out of your royalty. I have a friend in Texas that thought she would be smart with her 60 acres and not sign a lease. Needless to say they have had numerous workovers and a valumonus amount of other bills, and she hadn't received any money in more than 15 years, while all of her neighbors have been receiving money from the get go. Yes it is a huge risk not to sign, while you miss out on your signing bonus (that you don't have to give back to them if they don't drill), but most of all you have to help pay the bills out of your royalty. In my opinion something is always better than nothing.

• ▶ Reply

Permalink Reply by Les Bamburg on July 14, 2008 at 15:51

Steve, just one small correction to your post. Bills are paid from production ("revenue"). There is no "royalty" because there was no lease agreement. Also the non-consent party is responsible for their share of costs even if the well never reaches pay-out.

• ▶ Reply

Permalink Reply by Bobi Carr ("parker") on July 14, 2008 at 17:21

I have heard of OG companies still offering a lease and royalties to mineral owners after the well is in production. It must be in the OG companies best interest if it is still an option after the well is drilled. Of course, I understand it would have to be a desent well for them to still be making the offer. But according to the company CEO these aren't rat hole properties here.

• ▶ Reply

Permalink Reply by Les Bamburg on July 14, 2008 at 17:38

Parker, that is my belief also that a mineral owner can lease his mineral rights at any time if not previously leased.

• ▶ Reply

Permalink Reply by Bobi Carr ("parker") on July 14, 2008 at 17:47

Are you a landman? If so do you work for Twin Cities? I seem to have offended Randy, because I don't agree with the tactic that TC used as far as holding meetings in Churches. If you do work for TC that does not mean I hold it against you personnally.

• ▶ Reply

• ‹ Previous
• 1
• …
• 5
• 6
• 7
• 8
• 9
• 10
• Next ›
• Page