A question about the value of location.

I am part of a group of landowners and we have about 1000 acres of contiguous land. all the landowners surrounding us have signed with a landowner's association that we do not like. My question is this- If all the surrounding land is leased to an oil company, does that make our spot more valuable to that oil company or does it put a damper on competition with other oil companies and therefore put pressure on us to sign with the same oil company as the surrounding landowners? Also, would there be difficulties with pipelines having to cross land leased to other oil companies?

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Permalink Reply by Billy Park Whyde on February 8, 2012 at 1:05pm

First of all if the landowners association  members have not had the land leased as of yet and they do not like the association what keeps them from bailing out of it?

Permalink Reply by oildude on February 8, 2012 at 1:45pm

The landowners on the surrounding land signed an agreement that they would let that association negotiate for a specified time period. If they " bail out" but end up leasing with the same company they still have to pay the percentage to the association. That is one reason my neighbors and I wont join it. We dont want to tie up our land for any period of time. Also, the head of the association is a local buisness owner that has never negotiated a oil contract.  I meant to put this below your question but my laptop is screwed up. Sorry Billy

Permalink Reply by Terry W. on February 8, 2012 at 2:55pm

Usually you only have one O&G company leasing in any specified area.  They work

together.  This thing about competition, they stay out of the others area, and vice versa.

I say go directly to the O&G company and do your negotiations.  If you do not feel comfortable,

get an O@G attorney.  Talk to one of your neighbors who have already signed and look at their

lease.  That will be a very good starting point.

Stay tuned to this forum, and ask your questions.

Permalink Reply by oildude on February 11, 2012 at 3:55am

I appreciate the more in depth discussions that I have received about the original question but I would like to hear any general ideas that anyone may have or any first-hand experiences comparable to my situation. Thank you.

Permalink Reply by oildude on February 11, 2012 at 8:52am

Thanks Mark. Your answer to my question is exactly what I was looking for. It has given me a lot to think about. 

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