Replies to This Discussion

Permalink Reply by Eric on November 14, 2008 at 8:21

So no-one wants to venture out on a limb and offer an opinion. Seems like the Shelby County section has died off.

Permalink Reply by Eat Beef on November 14, 2008 at 15:35

I think OG exploration in Shelby County, is great. My people came here in the late 1800's and they were poor, but they held on to the land, it was important to them. My grandpaw, sold off minerals when times were bad, I even know of him trading 50 acres of mineral, for an old T-Model, that didn't even run. But, all in all they kept some of the minerals, and now some of the kids and grandkids will enjoy the money from their early investment in the land, in Shelby County. I am so happy for the good fortune.
I think the incoming administration, will start the wheels turning to stop the off shore drilling, this will force those companies, to start drilling on land. Many of the small drilling companies, that are enjoying the money now, will start to go out of business. It can all start to turn down.

Permalink Reply by Gone Fishin on November 22, 2008 at 5:04

I would have to disagree with the statement "outrageous signing bonus being over". I dont think we in shelby county has seen bonus money even close to what it is worth. The smart folks who are being patient will be in very good shape when this thing kicks back off. As clean green fuel becomes a priority with the obama guys natural gas will be a goldmine. I'd be glad to take a bonus of 5000./acre if they will agree to 50% royalty. sounds fair to me.

Permalink Reply by Eric on November 22, 2008 at 5:30

While I agree somewhat that signing bonuses in Shelby County have been lower than the norm I also think that the economy is playing a big role in O&G development and production right now. The majority of businesses rely on loans for day to day running of their business and these have dried up somehwat. I also think that the new year will bring an increase interest in the HS or maybe that is wishful thinking. Anyway we have passed on 2 offers and will wait at this point in time. I would be satisfied with 5000/25%.

Permalink Reply by Jimmy on November 22, 2008 at 16:16

You guys that held off did well. Patience is always best. These companys went in and gave money as well as all of the snakes running around getting signatures. I held off and am looking forward to when they come chase me down again. As a result, I have what they want just as you do. Holding out and sticking together is the whole reason for this website. The web is a tool in the hand of the land owner as well as the company.
Yes, the companies do look at these websites to get an idea of what is going on. Be aware, those snakes that create drafts also read this blog.
Stay strong and be patient. Save this message in your favorites because they will be knocking your door down to sign once those 1500 horsepower rigs start rolling in.

Permalink Reply by Gone Fishin on November 23, 2008 at 13:48

I have a feeling it wont be long. The pipeyards near me are stacked deep and high. Not just one but all and a couple of new ones opened recently. They are gearing up for something big. Also a friend said his buddy has a company who does drill site pads and he is booked up for new pads after the new year.

Permalink Reply by intrepid on November 23, 2008 at 15:21

If the area around ETexas-NWLa. winds up looking anything like the area encompassing the Barnett Shale I believe you are right and your friend's buddy will need to hire some good help to keep up with it.

Permalink Reply by Eric on November 25, 2008 at 4:27

My understanding concerning this is that if you are only talking about Mineral Rights in a specific Abstract then you are effectively "Forced Pool" if they drill on that abstract. My wifes family has MR's on 50 acres, I believe that enough land for a unit has been leased with the exception of our MR's. While I know that 25% is about the max for royalties I also believe that it is in the best interest of the O&G company and my family to be offered a suitable signing bonus and no we arent asking for a lot compared to what most have been offered here, just what we believe is fair to all concerned.

Permalink Reply by ogmladvisor on November 25, 2008 at 5:10

J, you are correct. Eric, you are not correct.

For those mineral owners that intend to hold out for a 50% royalty, I would suggest you take that $3.5 million you have in your life savings account and drill your own well, that's the only way you'll ever see a dime's worth of royalties. Or if you don't have the 3.5 million, then you can just sit on your front porch and count the wells being drilled around your property, but not on your property.

There is no force pooling in Texas, and the drilling of wells and the forming of units have nothing to do with abstracts or surveys. Also, If you have an undivided interest in 50 acres, and you are the person holding out, you are putting yourself at risk. The other owners in that 50 acres have a right to produce their minerals without penalty - so says the State of Texas. So even if you never sign a lease, and as long as your 50 acre tract is not the drillsite, all of the other mineral owners in the tract that signed will get paid (both bonus and royalty) and you will get nothing...ever. If you don't believe me, then call a qualified oil and gas attorney.

Permalink Reply by Mark on November 25, 2008 at 13:54

Ditto! You nailed it ogmladvisor.

Permalink Reply by Gone Fishin on November 25, 2008 at 15:14

So J according to you why sign anyone. Just buy some land and drain everyone near you and keep all the money. Bull.
Anyone who knows anything about the charactaristics of the shale knows that aint hapening. Maybe oil but not shale gas. Sure it is probably better to sign a good fair lease offer with good terms than to hold out forever. But dont pretend his share wont be paid so he needs to sign for nothing and be glad of it.
Non Participating Royalty Interest. Eric know your rights
http://www.beardenlawfirm.com/Texas%20Oil%20and%20Gas.pdf

And Ok, I suppose you can talk me down from 50% but the bonus money has to be right. I am in a little different situation than eric. I am on several hundred acres of shale. What do you suppose a drill site in the middle of a proven field in the shale will be worth in say 2 years. Pay me now or pay me later. Its for sale but not on sale.
If they can offer $250. and 1/6th then included with my counter offer I want a foot rub from their CEO. I'm sure we can come to terms some where in fair value territory.

Permalink Reply by ogmladvisor on November 29, 2008 at 19:35

Gone Fishin...

There is no one pretending here...if a lease isn't signed, royalties aren't paid, simple as that. NPRI doesn't apply since Eric's family owns a mineral interest and participates by signing a lease. An NPRI would only apply to Eric if his family owned only royalty and no minerals (there is a difference), and the mineral owner signed a lease. Minerals and royalty can be severed, just as minerals and surface can...which is the only time an NPRI owner exists.

I stand by my earlier statements Gone Fishin - you stick to your guns, and I'll stick to mine, and we'll see who gets paid and who gets drained. If you find someone dumb enough to invest their money and drill your acreage for a 50% net revenue interest, I'll show you someone that won't be in business long.

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