Replies to This Discussion

Permalink Reply by Dion Warr, CPL on February 21, 2018 at 16:19

Skip:

I think the words just started flowing out of me and the last line just sprang forth - if it came from someone or somewhere else, I'm not aware - the observation and sentiment is not unique.  Squirrels find nuts occasionally, LOL...

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Permalink Reply by David Crockett on February 21, 2018 at 16:40

I agree.  It was fantastic.  (the last line I mean.  I didn't really understand much of the rest of it:)I think that everybody feels like that when they accept a contract.  You should frame that and put it on your wall.  

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Permalink Reply by Skip Peel - Mineral Consultant on February 21, 2018 at 16:45

I thought so.  LOL!

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Permalink Reply by John Lann on February 21, 2018 at 6:36

I do know someone at McManus,La with 400 acres.  Someone has been negotiating for him for about 3 - 4 weeks.  Currently at $900 & 20%, has not signed yet. 

John Lann   East B R Parish

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Permalink Reply by shannon johnson on October 19, 2018 at 7:50

My name is Shannon Johnson and live on Lindsey Lane in McManus.  I recently joined this forum to keep up with updates on the gas/oil exploration in this area. My brother, myself, and two other neighbors own roughly 200 acres in the area.  What, if any, benefits will we have in the future in regards to drilling on our land or benefiting from surrounding land owners that allow drilling?  I am new to this experience and would like to be educated on how this works. Possible exploration on our land or receiving royalties from surrounding exploration.  How does this work? If they are drilling in the local area, how big is the pocket of gas/oil will they be pulling from? Will my land be located over this area?  Again I am new to this.  Sorry for any lack of knowledge on the terminology I've used.

Have a great day and appreciate any feedback that i may receive

Shannon Johnson 

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Permalink Reply by Skip Peel - Mineral Consultant on October 19, 2018 at 8:08

Hi, Shannon.  Where to start?  :-)  If you are offered an O&G lease, you will have the opportunity to negotiate terms.  You will be made an offer for an upfront payment per acre for signing the lease and then you will be due royalty income if any productive wells are drilled.  Since you are posting in a discussion for the Austin Chalk  (AC) Play, I will base my opinions on what I know about this current exploration trend.

The companies drilling AC wells are setting up large drilling units.  So far 1920 acres seems the size of most.  If you are in a unit, any producing unit well regardless of its surface location will pay every mineral owner a percentage of production based on the number of acres you own in the unit and the royalty fraction in your lease.

These AC wells will be horizontal wells and each unit will be sized so that a company can drill multiple wells.  Forming a unit has no effect on your lease term.  The right to develop conferred by a lease is only maintained by production, not by permits and not by drilling an non-productive well.  Once production begins all the leases remain in force.  Such a unit is said to be Held By Production (HBP).  There is not requirement for a company to drill more unit wells but if the first well is economic the chances are that they will.  The life of a unit with productive, economic wells can be decades so it is wise to take time and get professional help negotiating the terms of a lease.  Even with the typically large AC units, your 200 acres gives you negotiating power.  You want a fair market lease but you don't want to be unreasonable to the point that a company decides to leave you out of a unit or simply not drill your unit for lack of sufficient profitability.  That's if you are interested in receiving royalty payments which could be quite substantial for 200 acres.

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Permalink Reply by shannon johnson on October 19, 2018 at 10:17

Thanks so much Mr. Peel for your response and explanation.  I now have a better idea for understanding this process. Not sure if you can elaborate on this but what do you think the chances are that they will be interested in this area? I'm located about a half mile northeast of the Hwy 19 & Hwy 10 intersection. I'm just wondering if I should inform my neighbors about this possible opportunity or do we just wait to see if any of us are contacted?

Thanks for your time. It's well appreciated

S. Johnson 

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Permalink Reply by Skip Peel - Mineral Consultant on October 19, 2018 at 10:24

McManus is within the area of interest for the Central LA Austin Chalk play.  It's always a good idea to keep in touch with neighbors when leasing is a possibility.  What's even better is to occasionally go to the courthouse, clerk of court office and search for memorandums of O&G leases being filed in the public record.  That will tell you what companies are offering leases and in what particular areas.

Permalink Reply by John Lann on October 22, 2018 at 3:46

Shannon,  did you see my post on Feb 21st.  As of 3 weeks ago, his family still had not signed.

John  EBR Parish

Oct 22nd

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