Pickens: It's All about the Mineral Owners (Forbes)
And then, says Pickens, there’s perhaps the biggest factor in America’s favor: private ownership of mineral rights. America is virtually unique in the world in that private landowners, rather than the state, hold title to the oil and gas under their acres. With average royalty rates in Texas paying landowners 25% off the top for any oil and gas recovered, that’s an enormous incentive for ranchers and farmers to welcome drilling rigs onto their land. That’s not the case in Russia, Mexico, China, the Middle East, and virtually everywhere else — where the government owns the minerals and farmers have to be coerced into giving access to drillers.
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Replies to This Discussion
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Permalink Reply by Joseph-Ohio on
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True Keith.
They are the landowner's asset.
Until leased or sold.
Then they become the lessee's / buyer's asset.
To be developed / disposed of by the lessee / buyer at their discretion.
Make the most of it that you can landowners.
I'm trying to !
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Permalink Reply by Frank Walker on
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Geeez. 25% in Texas! Even back in the halcyon days, here in the NE, 25% was a tough get!! Today, signing for a 25% royalty fraction is darn near impossible.
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Permalink Reply by 0ym9x5ag7ury2 on
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The states don't own the minerals but they have to enforce the law in order for those that lease to get a fair deal, and that isn't happening.
Check your lease, a lot of them (all of the ALOV leases) say the leaseholder must obey the laws of the state and that isn't happening.
But wait what's that shiny object over there? Later.
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Permalink Reply by Joseph-Ohio on
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You're attracted to shiny objects (bling) too ? !
What a co- incidence !
Me too !
Could it be beads or shiny metal or mirrors ? !
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Permalink Reply by Joseph-Ohio on
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Is it not a breach of contract to not perform stipulated terms and conditions ?
How to stop it from happening / continuing to happen ?
Court order reinforced by the sheriff / law enforcement ?
Would also have to take any producing well offline seems to me (if court awards the landowner a favorable judgement).
That all sounds time consuming and expensive doesn't it ?
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Joseph,
Now you are on the right track, keep looking.
Lawyers on one side, CHK on the other. You are between a rock and a hard place.
Lawyers = The good old transfer of public wealth scheme, tobacco, asbestos, black lung....
CHK = More of the same for Ohio landowners as has happened in PA,TX,OK, LA, NC, SD, MI.
But don't worry CHK has never really done anything wrong, I'm told there has never been a conviction.
The money you are missing isn't important to the state, so the laws can be overlooked for now.
You know where you are, you know the history, who else is left to turn to that can help you change the future?
You'll never know if you don't try.
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Permalink Reply by Joseph-Ohio on
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Been trying pretty hard by reading / posting / replying here on these pages and talking to other interested landowners.
What else can we do but to try and help one another landowner to landowner ?
Keep up the good work Ron, I'll keep on keepin' on too.
BTW the only thing I've discovered to help when caught between a rock and a hard place is padding - money might work pretty good if I can get enough of it.
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Permalink Reply by Barry D on
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The average is 25%, after over 100 years of "sustained" oil and gas development. (I know it all started in PA and Ohio)
I think the reason we have not seen this type of royalty is that the Utica/Marcellus are so new and unproven.
Here is a question;
Instead of demanding high royalty percentage up front would it be possible to have a split royalty.
One royalty until the well pays for itself and then a higher royalty after payout. (Yes I know there will be a debate about what defines payout, for now let's keep it simple.)
So before payout a landowner accepts say 15% and after payout is paid 30%.
Just a thought, not making a statement, please do not attack.
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Permalink Reply by jason irvine on
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I have posted on hear that my lease expires this January. I am in Wetzel and tyler as the line splits my property. I'm about 10 miles from the stadler pad and 5 from stewart winland. We have good wet gas from devonian and marcellus and now large wells from the utica. It seem like the going rate now in the area is 4k and 15 to 18 percent. This just doesn't sem right with sugh little risk. I'm will to except a lot less in bonus or even pay it back if they raise the percentage a lot and drill sooner. I was thinking 20 to 25 percent 1 to 2 k bonus with a 2 to 3 year lease. Any suggestions would be welcomed and I will post what happens in jan.
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Jason,
Take a look at your lease to see if the company who holds it has First Right Of Refusal. If they do you have to give them a chance to re-lease before you offer to lease to another company.
I assume you are talking about the Primary Lease term, there is almost always a secondary term and wording in the lease as to how that secondary term will be paid.
From what I've seen O&G companies don't like to let go of a parcel once they lease it, so you need to know what to expect from them before they act on the terms of the lease.
You could get a check in the mail anytime even though you thought the company forgot about you.
If your lease does terminate, find the other landowners who signed the same lease and form a group to negotiate $6,000 bonus and 20% Gross Royalty, or get picked off one at a time for pennies.
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Permalink Reply by searcherone on
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Today I heard what I thought was impossible, but maybe not. The statement was the reason the parts of Monroe and Washington Counties in Ohio that has the Wayne National Forest isn't being drilled yet is the government wants 25% royalties Maybe that is more true than I thought. 25% sounds good to this landowner.
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