Problems--Solutions--Pros and Cons
I've been kicking something around and thought I would put it out for the rest of you to kick around. We've been talking about many of the problems with O & G production and leasing and obviously some changes in the law should be made. So short of the government taking over the O & G business which none of us (or at least most of us) do not want, what are some good, common sense changes that would help the situation? I have two:
1. Oil and Gas leases should "sunset" every 20 years and have to be renegotiated by the company, regardless of production.
The reasoning behind this is that people should not be bound by something that was created 30, 40, 50 years ago or longer. My family has mineral interests in Panola County that has been HBP since 1946 by a lease my great-grandparents made with Skelly Oil Company. Think about all that has changed since 1946, but that lease is still there, still in place. Leases should be up-dated periodically to reflect the changes that take place both in the industry and in the surface area.
2. No more than 75% of mineral rights may be reserved if land is sold. 25% of the mineral interest remains attached to the land--always, no exceptions. Of the 75% that is reserved, it can only be reserved for 100 years, regardless of production. After 100 years the minerals revert back to the surface owner.
After that long a period of time and that many generations, the mineral rights are scattered over hundreds of heirs, and unless it is a very large tract each one owns a very small, insignificant amount and in many cases they don't even know they own them.
These are just two ideas. What do you think? Would this help or hurt? Do they needed tweaking a bit? Anyone other changes you can think of?
1. Oil and Gas leases should "sunset" every 20 years and have to be renegotiated by the company, regardless of production.
The reasoning behind this is that people should not be bound by something that was created 30, 40, 50 years ago or longer. My family has mineral interests in Panola County that has been HBP since 1946 by a lease my great-grandparents made with Skelly Oil Company. Think about all that has changed since 1946, but that lease is still there, still in place. Leases should be up-dated periodically to reflect the changes that take place both in the industry and in the surface area.
2. No more than 75% of mineral rights may be reserved if land is sold. 25% of the mineral interest remains attached to the land--always, no exceptions. Of the 75% that is reserved, it can only be reserved for 100 years, regardless of production. After 100 years the minerals revert back to the surface owner.
After that long a period of time and that many generations, the mineral rights are scattered over hundreds of heirs, and unless it is a very large tract each one owns a very small, insignificant amount and in many cases they don't even know they own them.
These are just two ideas. What do you think? Would this help or hurt? Do they needed tweaking a bit? Anyone other changes you can think of?
Views: 75
Replies to This Discussion
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Permalink Reply by Thomas T. Thomas on
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Well if #2 were in effect how could a middle class family buy a house in NW Louisiana? What if someone just simply wants a house and just moved from out of state? They don't want to pay 50K an acre for minerals.
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Permalink Reply by ez on
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i think when you sell land then you sell all of it surface and all the way to china. that would clear up alot of crap. also leases should not last for over 20 years regardless like was stated times change. there are people that could have had a life change a better life for there familys but alot will miss out because of stupid laws and greedy people. i own my minerals but i know some that thought they did and found out different. like the people in keithville that got took by some crap from 1921 if the state of louisiana had any kind of decency they would turn that back over to them familys with out a fight. there are people that has or will make more money thyan they could ever spend oh a dont forget our greedy a#@ goverment (aka uncle sam) they'll have to get almost half of everything...... rich get richer and poor gets poorer gotta love it ... you sure cant do a dam thing about it .
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Permalink Reply by herefordsnshale on
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Yes I guess that is something to consider, if it's a producing unit the royalties could offset the price but in a non-producing unit that could be a problem.
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Permalink Reply by Johnyd on
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Louisiana will soon be like texas where the mineral rights are not an issue....they will not be sold with soil top....."PERIOD"
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not an issue?! Tell that to the people who don't know who owns their minerals because they were sold 100 years ago and the files burned or were lost. Louisiana's mineral code is actually pretty good considering how confusing owning minerals is.
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Permalink Reply by P.G. on -
I agree. In Louisiana, if reserved mineral rights aren't used in a reasonable amount of time, they go back to the land owner. I believe that's the way it should be.
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Minerals are NOT sold with the top soil in Texas, In some states I think they are but not Texas. Even worse, they never expire in Texas, you can hold minerals forever.
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Permalink Reply by TRG on
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In Texas, minerals are considered "real property" and are not always sold with the surface.
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Permalink Reply by Randy on -
You may reserve the minerals for life in Texas. Which means you would pay us a lot more to run mineral title :) As we have to go back 100~ years.
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Permalink Reply by Two Dogs, Pirate on
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The Evans entities leases I have taken have something like #1. Louisiana has the best mineral law in the USA so why change it for the shale play.
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Permalink Reply by Bobi Carr ("parker") on
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I think you will see to different set of circumstances to the responses to these questions.
Set A = Subdivision dwellers
Set B = Country dwellers.
If you live in the city, once the well is drilled that will most likely be the end of any annoyances. Whether you own minerals or not, for every day life (not financial issues) it really doesn't make much difference.
If you live in the country, it is a world of difference. Read on some of the threads about problems with Cattle, Timber, Water and pipelines.
Most people's opinion will differ with their prospective of the issue.
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