Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on May 18, 2018 at 1:12

Those who see no harm in tossing out outlandish lease terms obviously were absent from the acrimonious early days of GHS.  A lot of uniformed speculation, lack of familiarity with leasing minerals and anti-industry sentiment led far too many land owners to have unrealistic expectations and make demands that were so far out in left field that they were simply passed over.  A number came on here complaining about how they had been "unfairly treated".  The discussion would go something like this.  Them, "All I asked for was a no cost royalty, a most favored nations clause and a thirty percent royalty after payout."  Me, "Well how many acres do you own?"  Them, "Twenty".  Case closed.  This was not an isolated instance.

Permalink Reply by Jesse Joyner on May 18, 2018 at 7:53

I agree, RM. Certain entities refer to it as a fair-and-reasonable contract that's beneficial to both sides. And if a landowner negotiates in good faith with a top-tier operator, and if the landman involved is on the same "good faith" page, then inking a "fair" deal is, indeed, the goal. Greed can bite people since there are folks who don't know a good deal when they're offered one. FYI: In general, once a lease is signed with an "honest" operator of substance and a well/wells are drilled and the direct deposits begin coming on a regular basis -- I've found that few folks complain as long as the lease is being properly enforced without nagging issues, which can be the case many times. Yet conversely, what tends to happen is that some landowners will get a bit bent out of shape trying to ink a great lease and let the fight push them in a corner with a "big-win" mentality where the overall picture, at times, gets lost in the details (as Jay has mentioned when a concept trend hasn't even been proven). A good operator with a reasonable lease, as you state, RM, is the goal, i.e., is the gold standard. And many landowners are truly appreciative of such do-the-right-thing companies. Still, the bad actors can sometimes dominate social media focus because the "happy and satisfied" mineral owners who do have good leases have no reason to publish their lot or waste their time crowing about it.   

Permalink Reply by Bob Zimmerman on May 18, 2018 at 9:58

So you think you have cut a "fair" deal with a "good" operator who is going to drill you a "great" well? Think again, they saw you coming:

LRS 31:127 Lessee's right to assign or sublease
The lessee's interest in a mineral lease may be assigned or subleased in whole or in part.

But, all is not lost:

LRS 31:128  Responsibility of assignee or sublessee to original lessor
To the extent of the interest acquired, an assignee or sublessee acquires the rights and powers of the lessee and becomes responsible directly to the original lessor for performance of the lessee's obligations.

You can really rake 'em all over the coals with a good attorney:

LRS 31:129   Assignor or sublessor not relieved of obligations or liabilities unless discharged
An assignor or sublessor is not relieved of his obligations or liabilities under a mineral lease unless the lessor has discharged him expressly and in writing.  

Permalink Reply by Skip Peel - Mineral Consultant on May 18, 2018 at 10:15

There is nothing "unfair" about assigning a lease or certain rights under a lease. There are few restrictions in a standard form lease. Therefore it should be a starting point, not the executed and binding final agreement. Far too many land owners do not demand to not be rushed and far too few seek out profession assistance. The Regulatory
Statutes have protections for mineral lessors, it simply takes an attorney familiar and experienced with the statutes to use them.

Permalink Reply by Doug Cox on May 22, 2018 at 2:59

BlackBrush, two tankers came out this morning...

Permalink Reply by Rock Man on May 22, 2018 at 5:11

Continual tanker traffic should mean that they are producing something to the tanks (that need to be emptied to make space for more fluid)

Thanks for the eyes on the ground update

Permalink Reply by Bob Zimmerman on May 22, 2018 at 5:40

Typical oil tanker trailer is larger in diameter:

Water tanker is more compact, beefier looking:

Permalink Reply by Rock Man on May 22, 2018 at 12:32

Jay, beg to differ on your comment about tank batteries. Anything coming out the well is going thru a separator with water and oil going to separate on site portable tanks (the trailer type).

Tank batteries will be brought in and permanently set up with berms and other equipment once the operator is done with post flow back testing. No sense doing this during post frac flowback for both logistical and economic reasons.

If well is poor and uneconomic to produce, operator will just pull portable tankage off location.

Did your source see a flare stack on location? Or is anyone seeing a flare at night?

Permalink Reply by Rock Man on May 22, 2018 at 14:46

Possible that they may have one of those "closed" flare units - gas is taken to a chamber and not openly flared. EOG used that type of system in E Tx a few years back.

Also more environmentally sensitive. Plus keeps unwanted viewers (us) from seeing flare and guess-timating gas flow rates.

The fact that they have trucks hauling off fluid should indicate some sort of flow back effort.

Did your source note any production equipment, test separators, etc. on location? Hook ups running from well head to equipment?

Permalink Reply by Rock Man on May 22, 2018 at 16:36

Pretty sure "1276" indicates a flammable load.

Permalink Reply by Bob Zimmerman on May 23, 2018 at 0:52

UN 1276 DOT PLACARD SIGNIFIES n-PROPYL ACETATE

https://www.cdc.gov/niosh/ipcsneng/neng0940.html

https://environmentalchemistry.com/yogi/chemicals/cn/Propyl%A0Aceta...

 

Permalink Reply by Tigger80 on June 7, 2018 at 4:05

Any updates on this well?

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