Texas Smackover Lithium Play
As the Smackover (SMK) Lithium (Li) play picks up steam we need to acknowledge that from regulatory and legal standpoints, there will be significant differences between the play in South Arkansas and in East Texas. Very soon we expect to know more about royalty provisions and regulatory guidelines. From past experience with dissimilarities between Texas and Louisiana mineral laws and regulatory statutes governing the Haynesville Shale, we hope to limit confusion and make it easier to access the information that will be pertinent to land and mineral owners.
In order to help members and quests to the website and to avoid confusion, we will start two new discussions, one for Texas and one for Arkansas. There is an abundance of information in the original SMK Lithium discussion threads and members may want to click on them and then save them to their computer bookmarks/favorites to be able to access them in the future as they will eventually rotate off the main page. After 24 hours, comments in those discussions will be closed but the replies will remain available in the website archive. Archived discussions are available by using the search box in the upper right corner of all website pages.
GoHaynesvilleShale.com was one of the first resources for mineral owners to learn basics, share information and generally provide a place where mineral owners could become more informed managers of their mineral assets in the age of the Internet. The website is pleased to continue to provide those services to those who will benefit from the SMK Lithium Play. Please keep in mind two things. You are a key part of the on the ground intelligence network by letting your friends and neighbors know about GoHaynesvilleShale.com and encouraging them to participate in site discussions. And since GoHaynesvilleShale.com is free for all to use, please consider a donation to help keep the website online.
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Replies to This Discussion
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Permalink Reply by Chad Ellis
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The royalty on the oil and gas needs to be closer to 1/5 (20%) or better. Depending on location and size of tract.
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Permalink Reply by Skip Peel - Mineral Consultant
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I agree with Chad.
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Permalink Reply by phoenix
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I agree to negotiate the best royalty that you can get. Also, to be sure to know what all other rights they may acquire under the agreement.
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Permalink Reply by Skip Peel - Mineral Consultant
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I agree phoenix. Other terms of a lease are important. Prohibiting or limiting the lessees ability to take post production deductions and rights of surface use or the total prohibition of surface use will also be important for some. An experienced professional can help point out all the terms that will be important based on the details of the mineral owner's interest.
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Permalink Reply by Lisa -
Thanks!! Chad’s comment seems to be missing? Any summary of it?
The attorney addressed thoroughly all that you’ve mentioned.
The idea of a flat fee royalty WITH the percentage sounds intriguing!!!
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Permalink Reply by Skip Peel - Mineral Consultant
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Lisa, I don't think Chad's comments are missing. His one reply is all he posted. When a member makes a reply and it remains in a discussion past the time allowed for editing, they can delete it but the reply box remains with the notation that the reply was deleted. You should be good to go if your attorney has covered what was mentioned.
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Permalink Reply by Jesse Joyner
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Seems to me, like has historical occurred with O&G, the early lithium leasing is being way low-balled. That's sorta been the standard protocol for "plays" over the years. Plus, the largest landowners tend to be inked first. Ask the old-timey landowners what they got for their "oil" back in the '20s & '30s, etc. Total low-ball. And some of those inconsequential bonuses and ridiculous royalty percentages are still in effect today. Such HBPs can be a curse, which the trusting country folk initially thought were good deals in Louisiana/TX/Ark. Of course, way back, not many people used lawyers and signed away rights for peanuts, which stuck with 'em for decades, with sum still bemoaning the old HBP leases. Heartbreaking. Yeah, and I know 'cause it happened in my family. So, if it was me, at such low-ball peanut terms, I'd pass and tell them to come back when they had a "fair & reasonable" offer, which is a Pentagon-type procurement term. In other words, seems to me that right now there's very little money garnered by landowners leasing their lithium. If it was me, I'd wait until the "play" got much more mature and the prices went up to legit O&G leasing terms in the 21st Century. Just saying. (Of course, the naysayers will argue that low-balling is needed to develop this new resource and make the lithium play viable. And that would mimic the similar argument used back during the first oil boom in the ArkLaTex.) Just saying.
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GoHaynesvilleShale.com (GHS) was launched in 2008 during a pivotal moment in the energy industry, when the Haynesville Shale formation—a massive natural gas reserve lying beneath parts of northwest Louisiana, east Texas, and southwest Arkansas—was beginning to attract national attention. The website was the brainchild of Keith Mauck, a landowner and entrepreneur who recognized a pressing need: landowners in the region had little access to…
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