Replies to This Discussion

Permalink Reply by Two Dogs, Pirate on January 31, 2009 at 10:54

Tell the landman to take a hike back to where he came from and the next time to call and set up an appointment to meet with you. They want what you got bad enough to drive from TX to MO without first finding out if you are there means they are wanting a lease real bad. That puts you in the drivers seat not them.

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Permalink Reply by Sarah on January 31, 2009 at 11:47

Thanks Two Dogs. My husband talked with him a little while ago. He's wanting to meet with us sometime between now and Mon. So, at least we have a little more time.

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Permalink Reply by Dion Warr, CPL on January 31, 2009 at 11:48

Sarah:

Don't allow yourself to be rushed. Just because this landman 'shows up at your door' doesn't mean you owe him any courtesy.

As far as past royalties due, the lease that you sign (should you elect to sign one) should be an agreement that 'looks forward' as to production past the date that the current activities, and should not contain anything that allows lessee to 'look back' into leasing your rights as to prior production. Be on the lookout for words like 'effective (some date in the past) or 'from the date of first production', etc.

If you would like to hear him out, then as TD indicates, have him make an appointment convenient to you, when you have no other distractions and a minimum amount of stress to deal with. He should be courteous enough to understand that; you should realize that he has been compensated for his time and expense by his client, and as such, he is to meet you at your earliest convenience, and not his.

Upon your setting the meeting, you should inquire as to this past production, and that you have been advised as to the possibility of revenues owed you from the well that you mentioned. If he wants a deal on those, he should be prepared to handle this in two transactions, one for past revenues, and one for any leasehold rights 'going forward'. This should not be a "car deal" where the trade and the new car all get rolled up into one (you tend to lose some of YOUR value that way).

As far as the past production, you should seriously consider hiring an experienced landman with some background in production and RRC research to report findings on the prior well as well as your possible interest in it. Don't just take the lessee's landman's word for it. Also consider retaining an attorney, particularly if you feel 'forced' legally by the landman or the lessee.

Hope things get better for you this year. Don't fret.

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Permalink Reply by Sarah on January 31, 2009 at 11:58

Thanks Dion! Hugs to both of you for responding to my plea for help. Dion you were in my list of names last night that I hoped would reply. I'm sure Two dogs was too if I looked it up. I really need to spend more time here. It's a big deal signing these leases. Not just for me but possibly for generations to come. My decedants thank you!

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Permalink Reply by Dion Warr, CPL on February 3, 2009 at 3:31

Sarah:

Jim is correct in stating that your land is not located in LA, and the rules are different on the west side of the Sabine (sometimes VERY different).

If you even feel like you're over your head, you are (no offense meant by that, but you should know). Especially for this amount of money for this amount of acreage, (and broker expense) for the landman to drive to your town, unannounced, and wanting to set an appointment with you. Not that the drive to Richmond is some impossible distance, but this seems like a little more than just a house call, and I wouldn't believe that NW MO is overpopulated with unleased mineral owners with holdings in E TX so as to have a landman set up shop there and make phone calls. Calling you first, setting an appointment, then possibly driving to meet with you: this would be the usual M.O.

It would be worth having some E TX experience working for you on this one. A few hundred dollars invested in good professional advice would pay for itself, IMO. Unleased interest in those areas were going at $5K per acre and 25% royalty (confirmed), without a prior producing well to consider, earlier this year. As I am sure you've read elsewhere on this site, prices have pulled back quite a bit in many areas, but they are still substantially above where they were a year ago.

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Permalink Reply by mary on January 31, 2009 at 12:23

"if you own an undivided interest in a tract of land that is included in a unit and you are unleased, you won't be in that unit." I'm confused about this statement. I own some property that is undivided. If the other owner who owns most of the land signs a lease but I don't sign and a unit is formed, I won't be in that unit, but what happens to my mineral interests if they drill?

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Permalink Reply by intrepid on January 31, 2009 at 15:44

Sarah, could you please tell us where your mineral rights are located? What survey?

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Permalink Reply by Sarah on January 31, 2009 at 16:18

Hi intrepid!

Well, based on this first contract a different company gave me. This was Kaiser and they were trying to do a title cure before they sold this to Devon. It said 156.25 acres more or less Shelby County, Tx. and being the same land described as the Frst Trace containing 82 acres a part of the John King survey, A-408, and the Second Tract, containing 74 acres, a part of the W.C. Alvice Survey, A-20, and a part of the James Hinton Survey, A-289.
I guess the 6.51 acres I have are spread thru out all these Surveys. Don't you have minerals in Shelby county also? I believe these surveys are ten miles south of Center.
The first well that was spuded back in 2000 was done by Marathon. I guess that was targeting the Cotton Valley.

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Permalink Reply by intrepid on January 31, 2009 at 16:42

Those three surveys do come together at a point near a Devon permitted location in the Pate "A" unit. Just south of FM 138 in the Arcadia community. You are also near the Oliver unit which has a large producing well and west of one McSwain unit which has several good wells. I think Jim Krow gave you some good advice about making a counter offer. You also might benefit from getting some good legal advice from someone in the area especially regarding exactly what you own and the prior royalty owed. Have you asked the landman to have someone from the company contact you about the prior royalty and what amount is owed? Are you dealing with Devon or some flipper on the current deal?

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Permalink Reply by Sarah on January 31, 2009 at 18:12

Hi again intrepid. Thanks so much for the excellent information you provided. You make a good point in making sure that people are dealing with Devon rather then a flipper. I asked my husband that several times to be sure. He said he's with Great Southwestern Land Services and representing Devon. I think what we're suppose to watch for is if Devon's name is on the contract as the lessee.
I was told last summer it's the Pates Gas unit but not sure about the A. Glad to know there is a large procucing well near by and several good wells east of us.
When he said 3200, he was talking to my mil because we never returned his call a few months ago. I just didn't want to have to be rushed in to this at this time. So he started calling my husbands family. Kind of embarrassing!
Anyway, when he talked with us he said just tell them what we want and he thinks he can get it for us. Yeah right. I hear people say if everyone keeps turning down the low offers it will make the price come back up eventually.

Thanks for the advice to get good legal advice. Who is good though? I don't want to get someone who wants a percentage of the royalty. You were talking about in east Texas area right? Not MO?. Anybody have any referals?

Thanks again for letting me know about the other wells.
I wonder what they'll do if we don't want to sign up? Do they really just leave your minerals out all together? That would not be good.

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Permalink Reply by kane on February 9, 2009 at 8:58

"Do they really just leave your minerals out all together? That would not be good."

Under Texas law, If your property is not within 467' of the surface location or well bore then they can just leave your property out of the unit. Most operators want to lease everything in the unit, but they will leave it out if necessary. Consequence of leaving it out of the pooling declaration is that you don't see any of the royalties and the operator takes your portion. TX unitization is pretty tough for the landowner.

Now, this can't happen in LA. You would remain unleased but own an interest in the production once the well paid out.

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Permalink Reply by Tommy Munds on February 2, 2009 at 14:46

The statement concerning Kassi's mineral documents has my interest. I would very much like to look at these documents. How do I do a search on this site to get to them? Thank you for your help. Tommy Munds

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