Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on January 8, 2016 at 9:03

Henry, no one with any specific knowledge can answer that question without knowing, at least generally, where in Shelby County your mineral interest is located.  If it's in an area with Haynesville Shale production I'd say this is an opening offer that should be countered.  Call it what you will, it is a point from which to negotiate if you would like to lease.  The right location and 275 acres would give you a good position from which to negotiate.  What would be helpful for you in this process is some feedback from members with minerals in Shelby and you're much more likely to hear from them if you post your question in the Shelby County Group as opposed to the Main Page of the website.  Use this link, join the Shelby group and post there.  When you do that every member of the group gets an email notice alerting them to your new discussion.

http://www.gohaynesvilleshale.com/group/shelbycounty

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Permalink Reply by Henry Nease on January 8, 2016 at 9:36

Skip, thank you very much for the link. Just recently joined this site so still trying to figure out how to navigate it. Thank you again!

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Permalink Reply by Skip Peel - Mineral Consultant on January 8, 2016 at 9:48

You're welcome, Henry.  In addition to knowing where to post a discussion in order to have it noticed by the members in the best position to answer and provide advise or opinion, it's a good idea to provide as much detail as you are comfortable placing on a public website.  For example, you could include the survey where your minerals are located.  This is an important bit of information for members who are familiar with past and current development in the county.  Also keep in mind that there are other important terms in a lease beyond the bonus and royalty.  It takes knowing something about those other terms to judge whether a lease is acceptable, or not.

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Permalink Reply by jffree1 on January 10, 2016 at 12:23

Shelby Co. has diverse areas of interest when it comes to O&G production. It would help if you would post the survey name, abstract number or even just the region of the county your minerals are in. Not all parts of the county are created equal re: acceptable bonus.

Are you really considering tying up your minerals for 7 years? I don't think I would do that, myself. That really sounds like a pre-2008 conventional bonus and royalty offer. There haven't been many of those filed since the Haynesville hit but conventional (vertical gas/liquids, shallow oil/associated gas) may be the only prospect you have if you are not held by production (HBP) at this late date. I might take that offer, depending on the area... but I'd ask for a depth clause... most likely. Make them define what they are looking for just in case they are speculating that they can easily flip "all depths" leases at a later date (ie: not a producer). I'd suggest that you'd be better off not to give them that. If they do name a target then they shouldn't have a problem with a depth clause. Offer them two or three years (drill it or lose it). Make them work for any renewal or extension. Conditions could change in two or three years, possibly a lot, and for better or worse.

There is oil and gas all over Shelby County but it varies by region as to what depth/formation it is found in and what it costs to produce it. None of it will pay big (any?) dividends on a well produced today if it is too costly to extract. Do some research on the company making the offer. Try to find out all you can before you sign. No need to get in a big hurry. Just because prices are low today and activity is next to nil... this is not the time to lose your mind and rush to take their initial offer.

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Permalink Reply by joe shepperd on January 15, 2016 at 10:06

anybody have a current handle on  completed well costs for H'Ville new drills in Southern Shelby?

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Permalink Reply by Carter on February 2, 2016 at 6:52

Henry, don't think it's unreasonable given the current economics natural gas right now, but I think getting tied up for 7 years for $100/ac is not wise.  You might come back with a 3 and 2 with $200 or $250 and just feel them out.

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Permalink Reply by Henry Nease on February 2, 2016 at 9:04

Hey Carter thanks for the reply. That's actually what ended up happening a 3/2 with 200 bonus

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