Replies to This Discussion

Permalink Reply by Two Dogs, Pirate on August 2, 2008 at 5:58

From my understanding they need 80% to drill a conservation unit.

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Permalink Reply by insomniacnla on August 2, 2008 at 7:46

JWS3,

I agree with your statement and I guess that we will see if the same holds true with the Haynesville Shale.

About 5 years ago, I would not agree to the lease terms of the o/g company and refused to lease. I was force-pooled for a shallow well in a 160 acre unit and was the only unleased landowner in the unit. Even though I only owned a little more than 10% of the unit, the o/g company refused to drill and moved on to other areas. The company decided to drill in other units where they had close to 100% of the landowners under lease.

It makes business sense for the o/g companies to initially drill the units where they have the largest amount of property under lease. Why would a company drill in a unit where they only have 65% under lease when they can move a little bit down the road and drill a unit that they have 95% under lease.

It could be that the financial potential for the Haynesville production will re-write what o/g companies decide to do with unleased landowners.

I do hope that everyone will benefit whatever decisions they make. Just know that there is the chance that certain units will be drilled much later than others, if they are drilled at all.

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Permalink Reply by Les Bamburg on August 4, 2008 at 1:45

Drillbit, please see my longer post below. My information comes from Louisiana regulations RS 30 & 31. You may want to read and form your interpretation of these regulations.

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Permalink Reply by Les Bamburg on August 4, 2008 at 1:16

My post was to address previous statements that unleased mineral owners (carried working interest owners) are some type of 2nd class owner or royalty owner after payout. RS 30 & 31 do not seem to indicate this is the case. Instead, such owners are entitled to receive information, participate in unit operating decisions and market their share of gas production if they so chose. RS 31 includes a lot of detail regarding the operator being required to submit well proposals to the unleased mineral owners.

My post was also trying to address that there are other types of costs the operator will seek to recoup from revenue after a well reaches payout beyond just normal costs. The type of costs that are recoverable is debatable and is the reason others have posted the unleased mineral owner may need outside assistance. I have been in this situation (in Texas) as an operator with 40+ carried working interest owners in a unit. This was a very large unit so the owners were always receiving AFEs and other communications. I and others would receive phone calls with questions from the owners and would provide information and explanations.

My statement about a well not reaching payout assumed there were other wells in the unit had that reached payout so the operator would retain revenue from those wells to cover the balance. This is based on payout being determined on a unit basis rather than an individual well basis. I have thought further about this situation and personally believe that payout is on an individual well basis. This would mean the operator would have no basis for trying to recoup any remaining balance on a well that failed to reach payout. RS 30 & 31 are not clear on this matter so I welcome any one else's interpretation.

By the way, I did not say anything about the company suing.

Sorry about the delay in responding but I am on vacation.

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Permalink Reply by Les Bamburg on August 4, 2008 at 13:32

Earl, I appreciate your diatribe example. It is much clearer now.

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Permalink Reply by Snake Stewart on August 4, 2008 at 14:53

Hey Les B , Other than all this , Hows your vacation going ? I'm stuck in front of this computer screen waiting for a payday so I can take a vacation .

Settle down Earl !
I can smell your sideburns burning from way over here ! HA!HA!

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Permalink Reply by Les Bamburg on August 4, 2008 at 16:02

SS, its going great as I needed a break from work. I did catch Chesapeake's concall before I left and enjoyed their defense of previous statements regarding the large potential of the Haynesville Shale.

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Permalink Reply by Snake Stewart on August 4, 2008 at 16:06

Watching their Show right now on TV

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Permalink Reply by Bobi Carr ("parker") on August 4, 2008 at 16:13

Earl,
I have found Les' post to be nothing short of informative.
We all look at these issues from different prospectives.
Parker

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Permalink Reply by Two Dogs, Pirate on August 4, 2008 at 16:26

Earl, why don't you find out the answers to your questions yourself, don't ask anyone nothing. You seem to get ticked off by straight up answers that people with experience comment to. Read the statutes Earl, make your own mind up on what they mean and come to your own conclusion.

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Permalink Reply by Bobi Carr ("parker") on August 4, 2008 at 17:00

Earl,

You need to chill out a little bit. We are all trying to be respectful of each other on here.

You may want to try tiger droppings. They never discuss much of anything - just attack each other personally.

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Permalink Reply by Bobi Carr ("parker") on August 4, 2008 at 17:01

I never thought I would hear myself defending landmen. The next thing you know I'll have to start defending my attorney.

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