Ending an outdated lease
Posted by Vidal on May 29, 2008 at 10:49pm
My land has been leased since 1978, and I'm assuming that it's paying 1978 market prices. Is there any way to update this lease to a reasonable market price or end it entirely? Thanks for the help.
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Reply by Vidal on May 30, 2008 at 5:55pm
I really appreciate the help. I'll have to look into finding a lawyer and answering some of these questions. Thanks again.
Reply by Greyshades on May 30, 2008 at 8:02pm
The older the lease, the fewer the bells and whistles, but look at the terms regarding depths and what gets held by production. Also, were there long periods when you or your family didn't receive any royalty payments? A lessee can't just sit on your land -- they have to drill, develop, produce minerals and pay royalties to keep the lease alive.
Reply by BJ on May 30, 2008 at 10:58pm
We have a situation similar to the OP. I just became an heir to acreage that has been leased since the 1960's. I just did a transfer of ownership and in the interim discovered that a new company is now handling the royalty payments. This is at least the 4th company this acreage has been leased to. I recall one company going bankrupt in the 1980's (I think).How do I obtain a copy of the lease? Does the company simply provide it upon request?
Reply by Greyshades on May 31, 2008 at 9:11am
You can go to the clerk of court for the parish where your land is located. The lease should be recorded there, along with any transfers of the lease from your original lessee to later operators. The personnel in the clerk's office can probably help you find the lease, if you give them the name of the lessor. However, the clerk's employees are generally not permitted to do fullblown index searches, so you will probably have to figure it out yourself or hire an
webster parish
Posted by stroud on June 8, 2008 at 2:01pm
any shale interest in the minden field in webster parish,,,16-19-08??????
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Reply by Mom on June 8, 2008 at 2:17pm
I would like to know this as well... I've heard so many rumors about minden, doyline, webster parish. Just don't know what to believe any more. I've heard a man in Minden had to deposit a lease check for $800,000.00.I've also heard that Chesapeake was looking around. I haven't seen it myself, though.Does anyone else know something?
Reply by Bayou Lassie on June 8, 2008 at 2:31pm
I know several that live in Minden or just to the east, north ofI-20, near 531 that signed a lease in the last week or so.Also have friend that has land north of Minden, but southof Sarepta area, that got $4000. per acre, for over 700 acres.Have seen the trucks that do the testing from the Old ArcadiaRoad north to the Sugarcreek Road area, then over to theClaiborne Parish line.So much of that area to the east of 531, is already leased asthat is in the "Minden Field" area.
DOs and DONTs on signing leases
Posted by Coonman on May 29, 2008 at 11:31am
Please comment on the dos and donts of signing....ei things to include or not to include
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Reply by Kassi on June 7, 2008 at 9:11am
Points To Consider Prior To Signing Mineral Lease Contracts1. The mineral rights are being leased in 640 acre “pools”.a. Once ¾ (75%) of the land owners sign leases the remaining ¼ (25%) of land owners are “Unsigned lease holders” with no lease agreement.b. The Un-leased mineral owner within the pooled unit is not entitled to receive any share of production or proceeds until the unit operator recovers the cost of drilling, completing, equipping and operating the well.2. If a well is planned to be drilled less than 3,000 feet deep, Louisiana law allows it to be located as close as 330 feet from any property line and 900 feet from other wells in the “pool”. That means there could be wells every 900 feet in some areas.3. Louisiana law allows permanent oil tanks to be as close as 500 feet from inhabited dwellings (homes) and 1,000 feet from churches and schools. (They must be surrounded by a fire wall.)4. There is great latitude for “mineral owners” (those who lease our minerals) to access the minerals on/under your property.5. A mineral lease allows for seismic testing automatically unless it is specifically mentioned as unacceptable in the lease.6. Louisiana law only requires a “reasonable prudent operator,” which means if the drilling company does not cause “excessive damages” you may not be entitled to recovery of cost for repairs, etc.a. Unless the lease specifies limitations to damages to your property and provides specifics as to restoration of property, you could be left with damaged property and/or homes.7. The drilling companies can use your surface water for their drilling needs if you do not have something in your contract that requires them to use alternate forms of lubricant for their drilling activities or to “fracture the well”. Drilling companies may also dig large water storage ponds on your site. (About 4.5 million gallons of water is used in the drilling process) Once the well is “fractured” to release the gas, the water and chemicals are “back flowed” and the pollution filled water must be recycled on site or trucked away for disposal. (Louisiana law allows the waste to be disposed of on site)8. Noise from oil and gas production can be a big issue . The bureau of land management published a study that measured noise levels from a drilling well at 83dBA at 50 feet from the well. Many states and municipalities have regulations requiring noise levels be reduced to 35 to 45 dBA at night. Fort Worth Texas requires that the noise be no more than 5dBA higher than ambient noise during the day and 3dBA higher than ambient noise at night.d. There are things companies can do to reduce noise levels:i. Use of pneumatic pumping units or progressive cavity pumps.ii. Limiting hours the trucks can run on your property; for example, 7:00AM to 9:00PMiii. Sound barriers made out of steel (NOT Styrofoam)iv. Mufflers on some engines or replacing diesel engines with electric motors.v. Housing compressors and engines in acoustically insulated structures.9. Louisiana law only dictates that royalties must be no less than 1/8 ( 1/5 on school land). Many people feel a reasonable royalty rate is typically considered to be ¼ or 25%.10. Louisiana law only dictates that royalties be paid in a “reasonable time”.11. Lease amounts vary and there is no minimum amount under the law. People in Stonewall have been signing leases for as little as $100.00 per acre to as much as $7,500.00 per acre. (One neighborhood in Shreveport recently signed for $10,500.00 per acre and 25% royalty12. Things to consider before signing when negotiating a contract for mineral lease:Limiting the number of wells placed on your property.Specifying an increased distance from your home for drilling activities and placement of tanks.A clause that allows you to stipulate where access roads may be built on your property and in what condition those roads need to be maintained.If you have children or domestic animals, you may want to consider requiring fencing along the access road on your property and around any drilling sites to protect your family and pets from potential harm.Requiring prompt payment for repair of any damages caused to your home or property due to access, testing or drilling activity.Requiring your property be returned to its prior condition or better when drilling or other activities are complete.Be sure you take pictures of your property prior to allowing them on your property so you can prove the original condition.Require safe disposal of waste from drilling or even removal of waste from your property including “back-flow water”Require adequate drainage management on your property.It may be wise to have clauses regarding noise abatement put into your contracts as most drilling companies will not go to the expense of providing noise abatement technology unless it is in the lease contract or is mandated by law (which it is not in Louisiana that I could find).Discuss your royalty rate prior to signing.Consider requiring royalty payments to begin within 90 to 120 days of commencement of actual production.You may also want to consider asking for your royalty to be based on gross not net production income.m.It may be wise to have a clause requiring your lease amount to increase if others in the 640 acre pool receive a higher lease price within a set time frame.SPEND THE MONEY FOR A GOOD LAWYER TO REVIEW THE CONTRACT PRIOR TO SIGNING (Some lawyers are handling cases for 3-5% of the signing bonus. I think 3% is reasonable especially if the lawyer does the negotiating for you and saves you the hassle)Some final “food for thought”:Owners of smaller tracts of land (15 or less acres) may be wise to collectively bargain for fair leases and reasonable royalties as well as protection to our environment.If you sign a wise deal with environmental protections and your neighbor does not will his or her lack of knowledge in signing impact your quality of life? Remember there is power in numbers. One land owner with 1-15 acres out of a 640 acre pool is minimal. 30 land owners with 1-15 acres have more significant bargaining power. Remember the lease you sign could impact your ability to sell your home someday. If you sign a bad deal, the next person may not be so interested in purchasing your property with the bad mineral lease deal attached. Be wise and discuss these issues as a community before signing leases, you will have to live with the terms of the lease for a VERY long time.I hope this helps.
Reply by bigball on June 7, 2008 at 11:03am
Kassi, thanks for posting.I see where you say "The mineral rights are being leased in 640 acre “pools”.a. Once ¾ (75%) of the land owners sign leases the remaining ¼ (25%) of land owners are “Unsigned lease holders” with no lease agreement.b. The Un-leased mineral owner within the pooled unit is not entitled to receive any share of production or proceeds until the unit operator recovers the cost of drilling, completing, equipping and operating the well."If a owner doesnt sign a lease agreement, and has to wait for the for the O&G company to recover all there cost:1. Since you didnt agree on the royalty package (example:25%). Does this mean that you will get a lot more royalty (example: 100%), since you didnt sign a lease agreement?2. How long before the co. recovers all there cost? Im sure, it would be awhile, but do have a ball park figure?
Reply by Kassi on June 7, 2008 at 1:45pm
Hi,I am not a lawyer but it is my understanding that, Yes you are entitled to 100% of the royalty for your portion of the pool if you are an unsigned lease holder. The rub is that you have to wait until all expenses are paid (some say 2 months some say 2 years) Then you get yours after all expenses are paid each month. You also have to keep an eye on them since rumor has it the o&g companies tend to play the waiting game with unsigned lease holders. Then there is the possibility that they will hit a dry well in which case you get nothing. I still think it is a good idea to sign a lease, just make it a smart lease and collectively bargain.
Reply by bigball on June 7, 2008 at 2:39pm
wow, you could really hit payday if you wait. i see what you are saying though. i to would rather sign a lease, but 100% compared to 20% is an insane amount of money.thanks for the information.
Force Pooling?
Posted by SoBoRes on June 9, 2008 at 8:22am
I have noticed reports in the Homer paper of activity in the area. I am looking for information as to if and how I may be affected by the Haynesville Shale specifically south of Lisbon. Currrently I am getting production from wells from 1991. When these wells where drilled we where advised there was "more gas, deeper" I would be grateful for any information.
From recent discussions with my neighbors, I believe that I am one of the last left in my area that hasn't leased. My family and I live in South Bossier (rural) and own the rights to a little under 1.5 acres. We were contacted back in Dec-Jan timeframe from TwinCites and they tried convincing us that $300 per acre and a ten year lease was a great deal. No, I didn't accept.Being family with many in the O&G business (most working outside of the greater S/B area) they recommended that we wait to sign anything. We surely weren't worried about the possibility of losing a few hundred in bonuses. Now, looking at it and talking with folks around here I'm not sure if my mineral rights have already been force pooled. I know that the farm land area surrounding my neighborhood has already been leased, and I believe O&G would already have enough of a percentage (>50% of 640 acre plot) within this area to force the pooling and have the approval to do so. Does anyone know how I can find this out or is there a law requiring them to provide me notice of this?How easy would it be to find out who owns the majority of the leases in my area? And should/could I attempt to lease with the same company or play on another company? I contacted my HOA president yesterday looking for others in my area, that haven't signed yet. I am hoping that there are a few left and then maybe we will have a little more to stand on.I do know that Chesapeake has a rig fairly close (not to mention their new facility a few miles down the road) to our community and have been told that they have tapped the shale from there. I am not sure of the rig number or coordinates, but I see the lights and hear the trucks in the distance at night.To all posting here, I really appreciate your time and knowledge and willingness to share. We don't expect to get rich, but it sure would be nice to have a little more to invest for our future.BTW, I've posted this same info on TigerDroppings and haven't received a response yet.
Replies to This Discussion
Reply by Haynesville on June 9, 2008 at 11:42am
THIS IS FROM AN EARLIER POST DEEPER IN A DISCUSSION....sometimes you have to dig deep in the discussions to find stuff. Hope this helps.At 6:41pm on June 7th, 2008, DrWAVeSport said…Subject Forced Pooling per Haynesville Shale PlayQuestion I have read so much per forced pooling. I Live in Shreveport, LA...Approx. 90% of recent legal notices (6/17 thru 7/8) per LA Office of Conservation where O&Gs file applications, contain clauses of "force pooling" & "integrating of all separatly owned tracts, mineral leases, and other property interests...with each tract sharing in unit production on a surface acreage basis of participation..." What exactly does this mean to (us) the landowners (who are attempting to acquire better land leasing deals)? Are they attempting to get out of lease bonus moneys? Nothing really sounds great about being force pooled. If you could give me (and my fellow Haynesville Shale stakeholders) the ups and downs per these forced pooling clauses if they are granted by the LA Commissioner of Conservation...Thanks so much for your help.--------------------------------------------------------------------------------Answer Dr; I'm not sure if you're talking about the pooling clause that is commonly found in leases, or about the pooling process that occurs when companies either can't locate or can't come to an agreement with some of the mineral owners in a tract they are attempting to lease.In the first example, don't worry about it. Most leases have pooling and unitization clauses that allow the lessee to "pool" or "unitize" several or more leases together in order to increase production from a field of oil or gas. If they were not allowed to do this, much production could remain in the ground. While there is the potential for abuse, in most cases you will never even get this clause activated as it is used mainly on fields that are nearing depletion.This type of pooling and unitization elects one well to inject a substance into it (perhaps salt water) in order to "push" the oil or gas out the other wells that have been pooled. Each mineral owner would share in the production from ALL the wells that were unitized. While your royalty fraction will be less in such a scenario (the newly created unit includes more land than your original lease did) you will still potentially receive more money in the long run as more of the oil or gas reserves are able to be recovered.If you are instead referring to the forced pooling process; this basically means that you will be "leased" at terms dictated by the State; based on what they think is "fair." A pooling order generally is good for only one year or less, meaning that if they don't drill within the time specified in the pooling order, the order will expire and you will be free to lease again. If you are pooled, and there is production from the well that is drilled, you will be paid based on your election of one of the several options afforded you in the pooling order. If you ignore the pooling order, a choice will be made for you by the terms of the pooling order.Some people prefer to be pooled, rather than lease to a company they can't reach an agreement with. They feel that the State will offer better terms than the company was offering.Hope this helps explain the pooling process.Frederick M. Scott CMMAnswered Question...I want to thank Mr. Scott for his timely and knowledgeable information (and for putting it into an understandable format). I appreciate him answering my questions that I sent to "AllExperts.com" for his reply, last week.Thank you again, "AllExperts.com" I have enjoyed all the Q&As that your experts put together that are helping the rest of us learn more about the O&G Industry.
Reply by SoBoRes on June 9, 2008 at 1:06pm
Haynesville,First, thanks for digging up that post. I had already read it and appreciate DrWAVeSport for sharing. Unfortunately, this still doesn't completely answer my questions. I guess my main question would be, can I as the owner of my mineral rights to my property, sign a lease with a different company if it is already pooled and I haven't been notified?Based on Mr. Scott's response, it appears that I should receive some type of order (to date I haven't seen anything). Does anyone know how I can find out if a request for pooling has been submitted? County clerk's office? And what would I need to find this information (e.g. address, coordinates, plot, section, etc)?
Over the last week we have been receiving calls from quite a few numbers in the local area and they never leave messages. This was the same tactic used by TwinCites for
about a month until I spoke with them, then I couldn't get them to stop calling.
Thanks in advance.
Reply by nisie on June 9, 2008 at 4:27pm
The Sonris site reports hearing dates and fields
We're sorry, but this discussion has just been closed to further replies.
Title Memorandum
Posted by Melinda on June 10, 2008 at 12:10pm
We are in negotiations with Chesapeake and they want to file a Title Memorandum instead of the actual Title. Is this a good idea? They do not want the other companies know the offers they make.
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Reply by Jaybird on June 10, 2008 at 12:19pm
Http://en.allexperts.com/q/Oil-Gas-3147/Shoot this comapny your question. Just go to the ask a quetion area on the site above.Very helpful site...just read all questions and answers there. It's helped me alot.
Reply by CaddoVisitor on June 10, 2008 at 12:44pm
What you are talking about is a lease memorandum, not a title memorandum. It has no bearing on your interests. All that it entails is that your lease signed with the company (in this case CHK) will stay off record. This is often done for competitive reasons. It also helps you out so that in the case no drilling occurs and you get the chance, any future lessors will have no prior information on past royalty rates and bonus amounts you agreed to. The memo gets recorded at the courthouse and your lease is signed. You and CHK will each keep a copy and the lease will be binding.
Lake Bistineau boundary
Posted by Scott Williams on June 11, 2008 at 11:34am
According to the state of LA, the 'official' boundary of Lake Bistineau is at the 148'6" contour line...a long way from the water line. Still in court as I understand it. In the mean time, royalties are being withheld amounting to the percentage of our land lower than that contour. Anyone have more info on this?Thanks.
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Reply by csc on June 11, 2008 at 1:50pm
no, but would be interested
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