Gas Leases

[m&kCattle]

Anyone have any experiences with them. Marcellus deal id booming over in PA and they are trying to get a bunch signed. I'm not overly thrilled but 2k an acre is tempting. We are seeing a Gas and Oil attorney. Just curious if any of you have dealt with this before?

 

[TexasBred]

Anyone have any experiences with them. Marcellus deal id booming over in PA and they are trying to get a bunch signed. I'm not overly thrilled but 2k an acre is tempting. We are seeing a Gas and Oil attorney. Just curious if any of you have dealt with this before?

Hire an oil & gas attorney to negotiate the lease for you and do not be in a hurry. "As Presented" the original offer will have absolutely nothing in your favor and will be a real bummer.

 

[upfrombottom]

I'm really surprised the speculators haven't been wearing you out wanting to buy you out. It was worse than having a fender bender and all the attorneys and chiropractors contacting people around here.

 

[m&kCattle]

Got to say, I've seen some pictures of previous and current sites and I'm not sure they print enough money.

 

[1982vett]

Don't know how much land you have, but if is a small plot put in no drilling on your property clause. On another note, if you have small acerage with the mineral rights, count yourself lucky. I know of one small 10 acre property where a retired couple made their home. Had some wood coverage they spent a lot of time clearing the underbrush out of. Real nice quiet spot to retire at. Oil company comes in, takes two acres, pushes most of the trees out and drills a well. The couple doesn't even own any mineral rights or the right to refuse to let them drill. All they will get is a piddling sum for surface damage.

 

[bird dog]

Get with your neighbors and pool your interest. One attorney can do it for all of you and save everyone a bundle plus you will be in a lot better position to negotiate with a larger tract of land. Get everyone together and try to figure out a drill site that is acceptable to everyone in the pool and give this land owner a bonus or an over ride for the use of his land. If they are offering $2000, I would ask for $6000 plus a 25% royalty. As mentioned, don't be in any rush. Your gas ain't going no where.

 

[Texas PaPaw]

Anyone have any experiences with them. Marcellus deal id booming over in PA and they are trying to get a bunch signed. I'm not overly thrilled but 2k an acre is tempting. We are seeing a Gas and Oil attorney. Just curious if any of you have dealt with this before?

Hire an oil & gas attorney to negotiate the lease for you and do not be in a hurry. "As Presented" the original offer will have absolutely nothing in your favor and will be a real bummer.

TB really nailed it. Can't emphasise enough to use an attorney specializes in oil & gas Leases representing the mineral owner.

Time is on your side. Contrary to what some landmen will insinuate, the shale I'm familiar with can't be drained when they drill on adjacent leases unless they commit mineral tresspass. Don't know what your state laws are regarding forced pooling if you are a small acreage owner. The more acreage you have the more leverage you have, especially if you have enough to meet the minimum pool acres. If you have a small acerage, they will have to pool you with adjacent acres to get the minimum. It will be best if you can get as many neighbors as possible to work together as a group, using the same attorney. The more acres you can put together the better deal you can get.

Wishing you the best.

 

[backhoeboogie]

Yes I have experience with this. Been through it 18 times so far. Some are good experiences and some are bad. We have had some very long threads in this forum on this subject.

Get an attorney as previously mentioned. Land men are worse than used car salesmen. (there are a few good ones)

Pool with your neighbors as was previously mentioned also. The land men will divide and conquer every time they have a chance.

Two uncles and one aunt signed for $250 an acre and 20% royalty. The rest of the family held out with me and got $9K an acre and 25% royalty. As you can see, the difference can be significant. In the millions of dollars. An attorney is cheap when you get in at the level.

Check the posting history in this forum.

 

[lavacarancher]

Yes, a little.

There are four hot gas areas in the USA today. The Barnett Shale (Backhoe country), the Haynesville Shale (Northeast Texas/Southwest Arkansas), the Eagle Ford Shale(Southeast Texas where I am) and the play in Pennsylvania (forgot what it's called). Until a few months ago the Barnett was the biggest discovery in recent history then Haynesville came along about the same time as Pennsylvania - well, not really. They knew about the Penn. play for quite some time. They just didn't know how to recover it very well.

Then things kinda changed when Eagle Ford was discovered or again, how to produce.

There have been stories of some folks getting as much as $10K per net mineral acre for their lease in the Barnett Shale area but those were far in between. In years past I have held out for $150 to $300/acre and usually got it. I always specify 20% royalty but have asked for 25% before and been turned down. I don't think you will find many companies that will go 25% because if its a really big field (lots of gas) the difference in 20% and 25% can really be significant to the operator.

I recently attended a seminar on producing the Eagle Ford and one of the major operators in the play stated that if they had to pay $2500/net mineral acre over the entire play it would only effect their bottom line $0.03. The difference between 20% and 25% could mean the difference in profit or loss.

So I guess what I'm going for is a pretty hefty lease payment and 20% royalty. That's just me. Do what you think you can get away with but don't be surprised if it blows up in your face if you try to screw them.

BHB and others are right. See your oil and gas attorney to modify the contract you will get. I'm not sure what pooling in this context means. Pooling in the oil and gas business means that depending on the depth of the well all land owners above the zone of interest are put into a "pool". Doesn't matter where the well is spudded, everyone in the pool will get royalty money. Oh, and the royalty is divided among those in the pool. For example if the royalty is 20% and there are five landowners in the pool and all have an equal amount of surface acreage each individual will get 4% (20% divided by 5 land owners=4%). Make sure that if you are placed in a pool they take ALL your land in the pool, especially if you don't have a lot of acreage. This is something you have control over in the contract.

 

[backhoeboogie]

Yes, a little.

There are four hot gas areas in the USA today. The Barnett Shale (Backhoe country), the Haynesville Shale (Northeast Texas/Southwest Arkansas),

I actually hold more Haynesville than I do Barnett. Long story. THe Haynesville pays much better.

I will not sign for less than 25% period. They always want to up the "bonus money" to get you to sign. I call it chum money and generally tell them what they can do with it.

I still have 8 acres that Carizzo has tried to sign for around 6 years now. They won't meet my terms on it. They say they can force pool me. So be it. When the ruling party sees all the other leases, they'll likely favor me. You can not deal with Carrizo direct. You have to go through a land man to lease with them. The land man holds out a cut every time. It is legal theft in my opinion.

 

[Brute 23]

Do a search on here. There should be several good threads about leases on here.

When you get an attourney make sure you understand the wording and proof read it after every adjustment. Don't just take the assume the attourney has it right. They make mistakes also and it can make a HUGE difference.

The big thing going right now is extensions. Watch for them in your leases.

Eagle Ford stuff is paying $5K an acre right now. Next year things are probably going to to get plum out of hand if gas prices go up like they are saying and the companies do what they are saying. Be ready for that 5K to turn to 10 or 15K. Alot of people are calling it the biggest play to every hit Texas and they will still be drilling Eagle Ford wells 10 and 15 years from now.

 

[CCRanch]

Im in Southeast Texas also, and have leased everything I own. Got 25% royalty. The most I've heard of people getting per mineral acre is $750. That's a couple months ago though. I'm on the northernest part of the land getting leased. A year and a half ago we leased 64 mineral acres before the big push came around, and now the company I am dealing with bought the lease and we are working on a 3 year extension. So who is the biggest player? Fairway, Genesis, Samson, etc...They are leasing like there is no tomorrow. I guess I am in the Eagle Ford Shale. I say get your money now because the chances of them hitting on small property owners are slim. I do know a man that has 50 acres in Dayton and they hit oil and he was in 90% of the pool. First months check was $200 k, then around $100k a month from then on, so it could happen.

 

[tncattle]

Im in Southeast Texas also, and have leased everything I own. Got 25% royalty. The most I've heard of people getting per mineral acre is $750. That's a couple months ago though. I'm on the northernest part of the land getting leased. A year and a half ago we leased 64 mineral acres before the big push came around, and now the company I am dealing with bought the lease and we are working on a 3 year extension. So who is the biggest player? Fairway, Genesis, Samson, etc...They are leasing like there is no tomorrow. I guess I am in the Eagle Ford Shale. I say get your money now because the chances of them hitting on small property owners are slim. I do know a man that has 50 acres in Dayton and they hit oil and he was in 90% of the pool. First months check was $200 k, then around $100k a month from then on, so it could happen.

Am I understanding that this man is getting paid $100K a month for them to use his land to drill on? How long does this go on? Maybe I need to move to Texas!

 

[1982vett]

Im in Southeast Texas also, and have leased everything I own. Got 25% royalty. The most I've heard of people getting per mineral acre is $750. That's a couple months ago though. I'm on the northernest part of the land getting leased. A year and a half ago we leased 64 mineral acres before the big push came around, and now the company I am dealing with bought the lease and we are working on a 3 year extension. So who is the biggest player? Fairway, Genesis, Samson, etc...They are leasing like there is no tomorrow. I guess I am in the Eagle Ford Shale. I say get your money now because the chances of them hitting on small property owners are slim. I do know a man that has 50 acres in Dayton and they hit oil and he was in 90% of the pool. First months check was $200 k, then around $100k a month from then on, so it could happen.

Am I understanding that this man is getting paid $100K a month for them to use his land to drill on? How long does this go on? Maybe I need to move to Texas!

NO, not for them to use his land. He is being paid a royalty for his share of the gas the well produces. Depending on how long it produces he will continue to be paid his share. His check depends on market price and production.

 

[TexasBred]

Im in Southeast Texas also, and have leased everything I own. Got 25% royalty. The most I've heard of people getting per mineral acre is $750. That's a couple months ago though. I'm on the northernest part of the land getting leased. A year and a half ago we leased 64 mineral acres before the big push came around, and now the company I am dealing with bought the lease and we are working on a 3 year extension. So who is the biggest player? Fairway, Genesis, Samson, etc...They are leasing like there is no tomorrow. I guess I am in the Eagle Ford Shale. I say get your money now because the chances of them hitting on small property owners are slim. I do know a man that has 50 acres in Dayton and they hit oil and he was in 90% of the pool. First months check was $200 k, then around $100k a month from then on, so it could happen.

The larger your decimal interest in any unit...the better the $$$$ . Production will drop dramatically over time but he also has time to accumulate a lot of money. AND if they drill additinal wells in the unit he gets even more. Good luck with the extention but unless you negotiated special considerations in the original lease the extension will carry the same terms as the original. Best wishes and good luck.

 

[Bobaroni]

Where there are wells there are pipelines. It makes some people rich, it destroys others. You have to decide whats important to you. In the Barnett shale a few years ago before it got to expensive to get it out leases were going in at 25 grand per acre then it dropped down to 5 grand an acre. Truly a Jed Clampitt scenario lots of rich folks out around weatherford texas now. So do you still think you are getting a good deal? Remember this.... solidarity, unity and a damn good attorney to represent all of you.

 

[TexasBred]

Where there are wells there are pipelines. It makes some people rich, it destroys others. You have to decide whats important to you. In the Barnett shale a few years ago before it got to expensive to get it out leases were going in at 25 grand per acre then it dropped down to 5 grand an acre. Truly a Jed Clampitt scenario lots of rich folks out around weatherford texas now. So do you still think you are getting a good deal? Remember this.... solidarity, unity and a be nice good attorney to represent all of you.

The very reason you should always make sure you're getting mineral rights as well as surface rights. Never heard of the big bonus' like you state except in the residential areas of Ft. Worth where nobody owned over 1/4 acre. Some went as high as $35,000 an acre. Those days are history. Drilling is continuing but companies are not paying nearly the bonus nor the royalty some once were offering. I hear the same is going on with the haynesville....Extremely expensive drilling and extremely rapid production declines.