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Story.I've never practiced Oil and Gas law, and the only thing I remember about the course from 20 years ago at Baylor Law School is that "1/8th" is involved a lot. Like I always say, if there is not an Indictment (or Information) involved, I don't know much about it.
So what's the going rate if a guy from Devon comes up to me and wants to drill on my 100 acres that I hold the oil and gas rights to? (Which, by the way, is a complete fantasy - much like the one I have with Natalie Portman.)
13 comments:
Around Wise/Montague it can range from 500 to 1000 per acre. We leased ours a year and a half ago for 500 and the price has gone up in the past year. Thats just bonus. If they drill and hit we get 25% royalties which is pretty standard around here lately.
The going rate for not owning the mineral rights and losing 5 acres of production land for the next 50 years is $5000. That is if they see fit to give you anything but noise, dust, pipelines, rusting tanks, and compressors that run 24/7/365 at about the same decibel level as a rock band.
Hellooooo, my name is Mr.Manbutto and I have large nice assortment of recently acquired diamonds I sell to you for exchange of mineral rights.
Your fantasy is to drill Natalie Portman?
We just got $650 and 25% plus $75 per year shut in (whatever that means), for one section here in our part of Gawd's Country (we're just a little too freaking close to Wise County), and some folks in these parts have gotten way more bonus money. Then I think about the increased traffic, air pollution and water contamination, and wonder if it's worth it.
Negotiate, negotiate, neogitiate!
Including surface issues. The down side is even if you have it it the lease the little producers usually ignore the provisions, because of the new tort reforms have taken away the little guy's ability to take it to the judge (who probably is already in Big Oil pocket like our elected officials)
It goes something like this, "Yes, you have a case, but it will take 500K to take it all the way, and I would like half of that up front.
My experience is however that Devon tho a behemus, usually does things in a business like manner.
The down side with them, they will drill one well and sit on the lease thru your great grand children rather than produce the whole property (thus the joke that there is an oil shortage)
Choose your poison.
Those that say you can negotiate obviously never have tried. It is all a sham - the gas company does exactly what they want. A surface owner trying to get something from the gas company is about the same as Barry Green getting that 2.5 million from Nigeria.
As much as I hear about how good Devon is - I have a contract for a metering station and connection to their pipeline on my property. The contract was written specifically to measure one well for a neighbor, a well that is specifically named on the contract. There are now 6 wells going through that metering station.
The FIRST thing my mother's lawyer asked me after her death was about division orders on oil royalties.
Then he got around to expressing his sympathies on her passing.
Yep, all that oil/gas stuff is really important Barry, especially in these days. And our family members are getting calls out the gazoo to sell our interests which are just almost too small to matter.
Good points 5:12.
Signing the original O&G lease..Good
Getting the "special" provisions you want in it..Better
Getting your first Royalty Check...Great
Living a lifetime with the screwing you'll DEFINITELY get from the O&G companies...PRICELESS!
I got $4,000 for a 5 year lease from Devon in Denton Co. They haven't done anything on the property. Lease is up this Sept. Do you suppose I can negotiate a better deal after Sept? What parameters should I push for? - O&G ignorant
Those of you with mineral rights should never sell them. Mineral rights go clear to the core and we never know what will be found the further down exploration goes. I have been told that there is yet more natural gas in another "section" under the Barnett Shale that will more than likely be tapped into in another 30 years or so. NEVER sell mineral rights!!!
Negotiate whatever you want but be sure it's paid up by December 21 2012 cuz after that there's no negotiating anything.
6:18
Never lease for more than one year at a time. Sometimes the lease money is better than the well. Best guess on ammount is average for around you. Some areas are hot, so no so.
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