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Permalink Reply by adubu on March 28, 2013 at 11:04

skip--- i understand from lessee they don't like short time leases, but as you said you can ask with some reasonable term and bonusyou never know until you ask--just like good lease languagre--- no ask no get

Permalink Reply by adubu on March 30, 2013 at 9:01

Skip--- I read on this site on many threads over last few years  about small tract of minerals have little bargaining power and makes sense very large tracts in several thousand acres would have very strong bargaining power but in general in your opinion since you have negotiated many leases for operators before over many years, have many acres does the smaller  owner need to have any bargaining power other that Lessees saying take it leave it or we simple leave you out? As you stated above 11.7 little to no bargaining power. 

Permalink Reply by Two Dogs, Pirate on March 30, 2013 at 9:12

Adubu, a lot would have to do with the size of the unit.  11.7 acres in a 80 acre unit would be a large lease.

Permalink Reply by Skip Peel - Mineral Consultant on March 28, 2013 at 11:44

Yep, agree.  However the number of GHS members with small acreage tracts who loaded up a list of non-standard lease clauses from reading the site discussions often fared poorly in the Haynesville Shale kerfuffle. One unleased member contacted me after their minerals were included in a unit with a well.  They held out for a $10,000 acre bonus (at a time when offers had dropped to $2,500), wanted a quarter royalty until well payout and then 27.5%, a Most Favored Nations clause and a No Cost Royalty clause.  He didn't get a lease offer and was surprised/upset.  I asked him how many acres he owned?  He said 5.  It's quite easy for members to suggest tactics to squeeze every last potential advantage out of a lease.  For many mineral owners that's not good advise.  Sometimes the first lease offered is a good lease and acceptable.

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Permalink Reply by adubu on March 28, 2013 at 12:04

Skip--- I agree 100% please don't missunderstand--- I would ask and if not received any thing better and with only 11-12 acres I would take the lease before it is taken off table and I agree bird in hand is better than 0.------- 25% R is good and if leases language is close but not everything you want but can live with it OK-- I agree he needs knowledgeable person to look at lease for him--- We are on same page--

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Permalink Reply by david kenneth merritt on March 29, 2013 at 2:11

THANKS FOR ALL OF YOUR IMPUT , I APPRECIATE IT VERY MUCH.

                                                                                                 KENNY

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Permalink Reply by adubu on March 30, 2013 at 9:35

Two Dogs-- yes understand 12 acres in a 80a. only unit is moderate/large size but today most of these Horizontal well units are 640 acres and most larger. So how many acres you need to have any power to negotiate? Or guess better question what % minerals in the   unit  do you need ? 12 in 80 = 15% 12 in 640 only < 2%

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Permalink Reply by Two Dogs, Pirate on March 30, 2013 at 10:01

You need 80% leased in Louisiana. Some folks ask for things that are way out of line. A lot of old timers will remember their parents getting a clause saying that they can have use of the natural gas for use in their home. Others want to have permission to access the drill floor and all the well logs and information. While  others may ask for a favored nations clause. Most of the stuff is for them to have bragging rights over everyone else  in the unit for getting  something others didn't get. A good lease will have horizontal and vertical Pugh Clauses, no cost royalty, limit the term of shut-in, no salt water disposal and damage clauses that would provide $XXX amount for surface use or no surface use at all depending on the situation. 

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Permalink Reply by Andrew on April 6, 2013 at 22:34

"You need 80% leased in Louisiana."

I have heard this dozens of times, but I can't find anything in Louisiana's law that says this. In fact, I seem to remember hearing that one operator in the Haynesville 30:10'ed a lease coalition that made up 45% of a unit. While that sounds like a tall tale to me, I still don't know where the 80% requirement is coming from. TD,P, do you know of a statute or code article that says consent of 80% of owners is required to pool?

Mineral Code Article 175 is the only place I could find the figure 80% anywhere, but that article deals with the minimum consent among co-owners of a mineral servitude for one of the co-owners to conduct operations. Perhaps that's where people are getting the idea that 80% of the owners have to agree to be force-pooled. Considering that the pooling is "forced," I don't see how their consent would matter.

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Permalink Reply by Skip Peel - Mineral Consultant on April 7, 2013 at 2:20

Correct, 80% of undivided interest in a tract is required for development to go forward.  My attorney explained this to me after I had called the Office of Conservation and asked the minimum acres under lease to apply for a unit question of the division's attorney.  Once I had confirmed that there was no minimum and thought about it for a while I came to the understanding that market forces drive unitization.  No operator would be likely to form a unit with a large number of open interests considering LA mineral law.  They certainly would not drill it with that many non-consent interests.

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Permalink Reply by adubu on March 31, 2013 at 9:46

GoshDarn --- have no argument with anything you said. I understand TwoDog has lots of experience and have respect for his opinion is reason i pushed him for opinion on question. I also assumed Skip as a independent landsman had lots of experience with leases. Yep It's not 2007 today and gold rush most likely over for many decades to come. Yep all in location and what "sweet spot" for what ever formation oil or gas that operator looking to lease and possible to drill. But somewhere in there is a number of acres you need to have best negoiatation power on your side that you don't run the Lessee away on first counter offer. I would not think you would run them away with first counter within reason today. You can usually if nice find out what the max the landsman has approval to do deal and usual get that-- bonus,royalty, and certain reasonal terms. I am aware of XTO recently leasing a 700 acre tract that required only 3 people a 400 a 200 a and 100 a dry gas bossier shale proven offset nice wells continuous with this plat in east texas Shelby Trough area 22.5% R(obvious these 3 had good leverage on their side )$2000 bonus plus nice terms. These 3 were close friends.

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Permalink Reply by adubu on March 31, 2013 at 10:04

They also knew their money was in ground and only way to get it out was for some one to drill it so this lease was good for both operator and mineral owner to profit.

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