Replies to This Discussion

Permalink Reply by Two Dogs, Pirate on February 11, 2009 at 10:13

GD I heard that CHK paid 40% to the Crowells (Longlief Lumber) in the Austin Chalk.

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Permalink Reply by Dion Warr, CPL on February 11, 2009 at 10:43

TD:

On a certain lease, I can confirm that. Most (Crowell) leases signed in the mid to late-90s were at 1/3. Got to love Richard Crowell.

Then again the bonus was MUCH smaller.

Permalink Reply by Bobi Carr ("parker") on February 10, 2009 at 4:37

Jay,

With your stated 30 years of experience, your position would be better documented if you would be so kind as to give us a suit to look up.

Otherwise we might all be guilty of not doing our due diligence. Haven't you and other seasoned landmen suggested that mineral owners are responsible for their problems if they just take a LANDMAN at his word without further investigation.

I would think with all of your experience that you could document at least one suit. Couldn't you? Otherwise, it sure sounds like some of the things that we have heard in the past from LANDMEN.

Most of us have tired of scare tactics statements with no documentation.

And BTW, most of us would prefer to be leased, but under reasonable terms.

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Permalink Reply by Todd M. Baker on February 10, 2009 at 3:44

KB:
The operator can, repeat can, come up with some pretty interesting accounting charges against the well to extend the wells "payout" period thereby eating into the funds to accrue to the UMI. I am not adepth in LA O/G law, but would bet a dollar to a sack of doughnuts that the UMI would have to find a way to market their share of gas produced and might even have to pay for split connect on the well head to sell their share. There is always a handsome price to be paid to have the operator market your share of gas, ie 3-5%.

There other extemporaneous costs associated with the unit well, like seismic testing, if done, that the UMI would be resonsible for paying his share of.

I have always advised that if you are not prepared financially to be in the oil and gas business, don't get in. Regardless of all the hype about the Haynesville being the mother of all shale gases, bad things can & do happen and why would a person want to take that risk if they don't have the money to?

Leasing to a company that is in the business of drilling, completing, producing & marketing gas is the rational decision.

Remember, if it was as easy to make money as most people believe, you always have the choice to put together a unit and drill your own well.

TMB

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Permalink Reply by Todd M. Baker on February 10, 2009 at 4:03

Seismic can a post production expense of the first well or a pre-production for the 2nd well. You can call it what you want. Many seismic operations are conducted after first production to more accurately determine the stike of the shale beds to get better results from drilling. Again, I am not adepth at LA law, but I would bet those costs can be included in the total well expenses.

Sorry, KB, I don't have any real life experiences in LA to go by. Just using past experiences in other states and logical thinking.

TMB

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Permalink Reply by The_Baron on February 10, 2009 at 4:58

Not to interupt, but I have seen very creative accounting charges for the disposal of salt water and other wastes. One specific example comes to mind in a well that produced a large amount of sw was disposed of in a SWD owned by the operator. The rate for disposal was billed out to all the wi owners and one unleased l/o who went nonconsent. The wi owners then received a rebate (for lack of a better term) at a later date since they helped construct the SWD well.

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Permalink Reply by Jay Murrell on February 10, 2009 at 3:50

K.B.:

You want to limit the discussion to the law. I'm merely expanding it to include right and wrong. You seem to be reluctant to argue that point, so, I'll assume you see nothing wrong with the free ride option.

JM

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Permalink Reply by Jay Murrell on February 10, 2009 at 4:30

No, I'm talking the morals of individuals.

You encourage people to use other people's money to develop their assets and there will be negative consequences.

Count on it.

JM

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Permalink Reply by Bobi Carr ("parker") on February 10, 2009 at 4:58

Jay,

Is it moral to make a statement that something is a fact without willingness to back up those "facts" with documentation?

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Permalink Reply by Todd M. Baker on February 10, 2009 at 10:28

KB:

I interpret Jay's comments to not mean "you- KB", but you as anyone that encourages a person to do as he claims.

TMB

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Permalink Reply by The_Baron on February 10, 2009 at 11:08

I don't believe that was a direct threat. More like a prediction of bad things to come.

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Permalink Reply by Two Dogs, Pirate on February 10, 2009 at 13:45

KB, you ever heard of the "Murrell Gang"?

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