I guess there's no restriction on being psychotic and posting on this site???
Barnesville, Warren Township, Belmont county. Will NOT be re-leased. We have a lease with Gulfport done through Wishgard that expires in the next month. I had figured they would either re-up it or shop it to someone else, since it is only 15% and under $2,000/acre. (It was early days when I signed, and it was ssooo much better than the $5/acre we got from Oxford.) Anyway, at the beginning of the year they had the courtesy to send a letter saying they would NOT be renewing the lease, as it did not fit into their current plans. Although Barnesville is smack in the pickle, it is the wet gas pickle, which is going to need to wait on a cracker. I do appreciate their forewarning. We have mixed emotions on this one. When Antero goes ahead with its well in Barnesville, we are in range and may do better as an unleased entity. On the other hand, we had been sort of counting on the re-up. Time will tell. I have been encouraged by reports of Gulfport's good attitude in respect to releasing expired leases.
Apparently, it is true they don't have any money, they can't pay royalties either. Maybe see if Rice will lease it, at least they are making a profit. Gulfport is hiding something, or maybe it is all market enhancement, who knows I am not sure they even know, I am sure they tell there investors a different story. I just hope they can keep track of all the stories they do tell and all the paperwork involved in hiding it all. Good Luck.
Oil and gas companies are going back tot he old style of leasing (Yearly delay rentals). This is a smart move on their part. They do not have to pay all the money up front at once, allowing them to be financially solvent while developing wells. The whole point of leasing is to get our land in a unit and have a well drilled. The royalties will out pace anything we receive in terms of bonus over the long run. Sure, it's nice to have all the money upfront, but lets face reality it makes more sense for them to use yearly delay rentals. We got lucky to be paid upfront the first time around.
Wow. You couldn't be more wrong.
First, the idea that royalties, not bonus is the prize/goal is what sleazy brokers tell beginning landmen to tell the marks. It assures more money when the flipping occurs.
Bonus/rentals/royalty are equally important.
What you're saying would ring very hollow to the mineral owners who are in units yet are only accruing negative or small royalty payments, while bank rolling the pipeline people who struck sweetheart deals with their friends--the Operators.
It all stinks to high heaven.
Well, I think both bonus/rental and royalty should be a big part, however, there are definitely some shady activities going on with market enhancement and transportation costs, etc. these days. If a more fair royalty was being paid I think it would be worthwhile to focus more on the royalty, but yes, at this time, it seems like you may be better off going for a large bonus/rental.
Just my two cents.