A few questions
1 - Is there a reasonable average for new Haynesville well production? I realize that is a very difficult question and depends on a lot of factors.
2 - When a cross unit well is drilled, how is the production allocated? For instance if it cross 3 sections, do you divide your mineral acres by (640*3)? Or is it not necessarily equally prorated?
3 - Inherited property/minerals - if you are unleased in a section and there are existing wells you have discovered, I believe you can give notice to the operator to provide cost information to determine if the wells ever reached pay-out. Best to get attorney to handle? What happens if they have not been paying? Any penalties?
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Replies to This Discussion
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Permalink Reply by Skip Peel - Mineral Consultant on -
In most situations, I would take a 22.5% royalty with a no cost clause over a 25% royalty without. The question here is that of the language in the clause. Many mineral owners accepted leases with "no cost" language supplied by the lessee that turned out to not stand up in court. Their operator deducted post production costs from their royalty revenue. The wording of a no cost clause must be such that it is based on established case law. I would want an experienced O&G attorney to draft or review the language such that the lessee knew it was enforceable in court
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Permalink Reply by Quattro on
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Ok thank you all sincerely.
negotiating now.
This is inherited property/rights for my wife. She has some no cost in another section that was very good for her parents.
Trying to get best deal possible.
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