Replies to This Discussion

Permalink Reply by William C. Morrison on September 2, 2018 at 6:53

Roger that, I hope he feels comfortable after that screw job.  The typical bonus we got over in Pointe Coupee was $150 on a three year lease.  We had lawyers negotiating that lease so all the good stuff was in it and all the bad stuff was stripped out.  And all the land owners joined together so it was a big lease for them.  That is what they like when a big chunk gets scarfed up.  The Lafayette leaser transferred the lease over to EOG (we did not care who was behind the deal).  It has been more than 18 months since we all signed up.  I was really surprised at the lease as at the time crude was priced under $55 a barrel.  It is getting so that the familes are gradually interrelating to each other.  So we are acting like kin folk now days.

Permalink Reply by John Lann on September 3, 2018 at 5:50

He was not exactly happy.   He knew that several of his neighbors (all have sizeable acreage) had signed.  He did try to negotiate a bonus of a little more than the $400 NOW, and wavier  his right to any higher amount Amelia may get when they sell but, the Landman said they had only one offer.  No one in the area had heard of any other company making offers.  I had ask on this site if anyone knew of other bidders in St Helina but did not see any responses so he signed the next day.  Plus, one of his neighbors knows the parish assessor.  The assessor said Amelia was the only one working in the court house.   As we all know, Kirk did not get in this business yesterday.

John  EBR

Permalink Reply by Skip Peel - Mineral Consultant on September 3, 2018 at 6:12

The court house is a good place to start, as long as it houses the clerk of court's record room, when questioning whether there may be multiple companies offering leases in the parish.  And no one, even the assessor or clerk, can know for sure who is working in the record room.  The landmen don't wear uniforms or have badges that identify who they work for.  The lack of replies regarding leasing in St. Helena could be directly related to the lack of participating members from that parish.  We need to get the word out regarding GoHaynesvilleShale across all the AC/TMS parishes.   A Google search for Austin Chalk or Austin Chalk Louisiana does not  bring up any result for GHS.

Permalink Reply by Two Dogs, Pirate on September 3, 2018 at 6:42

Skip, Amelia doesn't have landmen working for them all the time unless you would consider hiring a local with no experience to be a landman. I know that some on here think highly of Kirk but this type of operation is what I consider to be the type that sometimes give landmen a bad name. When people call for my advise on Amelia, I always tell them that if it would be me, I would pass on their offer.

Permalink Reply by Skip Peel - Mineral Consultant on September 3, 2018 at 6:51

What Kirk does is not illegal and as long as his field representatives are honest with mineral owners, not unethical.  I do understand your concern, TD,P.   I think that many landowners in this area of central LA are not well informed and are vulnerable because of past leasing and development experiences that are less applicable today than they were even ten years ago. 

The staff at the Amelia office in Marksville weren't thrilled when NARO-LA came to town for their AC town hall presentation.  Informed land owners tend to ask too many questions and hesitate to jump at the first lease offer.

Permalink Reply by Two Dogs, Pirate on September 3, 2018 at 7:07

I guess someone with no experience can claim stupidity  when questions arise about ethics and honesty come up after the lease has been signed. I wonder about practicing law without a license.

Permalink Reply by LBP on September 3, 2018 at 8:20

I have spoken with Kirk several times recently regarding his offer.  He is very up front about the terms, and it is up to every landowner to make an informed decision.  My understanding is that the landowners in East Feliciana Parish who were part of his 40k acre sale received a $1300 an acre bonus -- well above what anyone else was paying.

From my perspective, the benefit that Kirk brings the landowner is his ability to create a large acreage block that he can market to a potential purchaser; and his successful track record should speak for itself.

All that said, we have a couple tracts of land in St. Helena Parish and have not yet signed up with Kirk and have not yet been approached by anyone else wanting to lease.  

Permalink Reply by Two Dogs, Pirate on September 3, 2018 at 11:56

There are things that are much more important in a lease than bonus money but many can't seem to see past that one time payment.

Permalink Reply by Skip Peel - Mineral Consultant on September 3, 2018 at 12:06

Agreed, TD,P.  That focus on bonus has a basis in past history for this region but is a mistake in the present.  Anyone making decisions on what happened previously may be making a mistake in the present.

LBP, it is okay to post your positive opinion of Amelia but it would be more helpful for members to provide the other terms in the leases being offered.  What is the royalty fraction?  Are you signing the standard lease, or do you have an Exhibit A you can share?  What is the lease term?  The "benefit" of aggregating leases into larger, contiguous lease blocks is largely a benefit for Amelia and the company acquiring the leases from Amelia.  Depending on location, not so much for lessors.  This is not an attack on Amelia, Kirk or any speculative lease programs.  This is a discussion about the nuts and bolts of what could be a very long term agreement with implications that may only be evident in the future.  Some of us have been down this road many, many times before.

Permalink Reply by Jesse Joyner on September 3, 2018 at 13:54

So what did Kirk get out of the deal? Would it be something like $200/acre bonus and an ORRI? Or does he negotiate a flat fee from the buyer?

Permalink Reply by Thomas LaSalle on September 19, 2018 at 3:08

They give nothing up-front to landowner and get nothing up-front.  Under our deal (which expired after 6-months and we elected not to extend) with Amelia, they were to get 8% of bonus and 3% of royalty if they flipped deal, as he was shooting to secure a 20% no cost royalty for landowner/us (which means he was to lock in a 23% no cost lease with operator).  The optional bonus payment after 6-mths (or perhaps a year for some agreements) seems to just be a 'bone' they dangle as don't see where Amelia could pay that kind of bonus money out (on the 384,000 acres in W. Fel, they were talking about raising that to $900 - so that would be 345MM out of Amelia's pocket to secure option on all - even at $400 per acre, not the kind of money they would likely pay out) .  Their intent is to 'flip' deal within the 'ride' (free) period.  We had our own personalized lease we were going to use if they were able to flip the deal.  Amelia was very up-front with us and do think they can help drive up bonus payments when they have enough acreage signed up in a 'hot' area that the operator must take.  However, does seem operators will avoid this type of 'pressure' at all cost and just wait out this approach when possible.  JMHO

Permalink Reply by Skip Peel - Mineral Consultant on September 19, 2018 at 3:24

It's a speculative industry.  And this is very early in a potential play that is not an unconventional reservoir.  If it was, the dynamics would be much different.  Until exploratory wells prove up economic areas, leasing very large areas will be a crap shoot.  Those unleased mineral owners who end up in proven economic areas can likely do better than the terms offered by Amelia.  Those who end up in non-economic areas will get nothing.  So, plenty of risk to go around for all parties.

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