I'm hopeful that I will be able to sign a new lease as mine is set to expire in January of 2015. They have not touched my property located in Tyler county since they signed.

The last time I was ignorant to all of this. I still have barely scratched the surface but at least I can spell Marcellus and have heard about the Utica this time. I see the bonuses being paid and royalty amounts being paid here fluctuated a lot. I see people talking about how little some of them are making and they are in good areas. I suspect the companies are making quite a bit more then us. I understand they do the drilling and have the investment in exploration but we own the land. I wish I could calculate the appx. Amount they will profit on the well and try to figure out what the land owner share should be. I know we can't put a exact number but we should be able to figure out a appx. Percent of royalties which reflects that appx. Amount we should make.

Any ideas on the appx. Profit these companies will make in good and or bad areas. Any thought would be greatly appreciated.

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I get what you are saying LERRET, but a lot of landowners might find it, oh, let's use the term difficult, to feel too much sympathy for gas and oil companies. Especially landowners that are HBP by older leases that were hawked by these poor struggling companies while they had proprietary knowledge that farmers in particular did not. Oh, and don't forget, farmers that are having great difficulty getting even what their poor quality leases promise in some cases. O&G companies can sure afford excellent lawyers after paying their exorbitant production costs. Just business, just business they say. Your fault for not checking up on us more carefully they say. I think business is pretty good for most oil and gas companies. After reading your post, I am surprised that they even try. Maybe they should try farming, it has to be easier. Just ask a farmer.

Being both a farmer, a mineral owner, and a mineral appraiser, I get to see both sides.  Yes, many companies have screwed folks.  But dammit...why in the world would you sit down at your kitchen table with some stranger who won't even disclose who he is working for, without legal counsel, without professional advice, and sign off on a lease?  Would you do that to sell the farm?  Would you do that to start a business?  Would you pick a stock and call your broker up and say you found a company with a really cute logo and want to buy that stock?  Of course not. Why do you do that with minerals?

I got a call from some people in a (oil) remote area where they are offered $10 an acre, 1/8th royalty, and post-production expenses.  They not only had the landman pressure them, THEIR OWN FAMILY was urging them to sign.  The sucker lead was that we need EVERYONE to sign or this well won't be drilled.

They asked to up the bonus...no go.  They asked to up the royalty...no go.  They asked to remove the post-production expenses and apply horizontal and vertical Pugh clauses... NO GO.... So they said, No. We will not lease.  Now their whole family and all their neighbors are mad.

Sorry I don't want a well so bad that I won't make any thing from it!  And they are all standing on their head wanting to commit economic suicide.

Someone said CLASS ACTION....In Texas, a Class action is a disaster usually. You never get past the first court.  And in other states it can be hard to easy but in any case, you are talking YEARS and DOLLARS of time.  So what's the point?  IF the lawyers get the money and not the oil company, is that a victory?

The court created a settlement deal in one interest I have. Occasionally I get a letter from a lawyer dunning me for more money to maintain a watchdog that the courts created to see that Shell (now Kinder-Morgan) does not screw us. That's what CLASS ACTION is all about.

No one suggests the oil companies need sympathy. But they drive these hard bargains because they know it can go south in a hurry. They also understand that if their investment is not returned within 18 months of drilling the well, it may never be returned or may take a decade or longer to break even. That first initial flush of gas and oil is the bulk of the income but once that well is on line, it may linger producing for decades at a very low level and any further development may languish if you don't have the right lease terms.  In many cases, you are better off being integrated with forced pooling.  And folks in states without force pooling do not realize they can literally be "spaced out" of the entire play and make nothing...and be done so legally.

LERRET. If I am bitten by a Viper, it is my fault for not being wary. If I am stalked by Hyenas, it is my fault for being weak or isolated. If I am huckstered by an O&G company, it is my fault for not being more educated, more ruthless, and more funded than them.

Regarding your first paragraph, it was different drilling procedures, different drilling footprint, different stories, and different times when a lot of tailgate leases were signed. Still it was ultimately the land owner's fault for being uneducated, naive, and trusting. Like I said, different times.

Regarding the rest - Some of us just do not accept the concept of "We had to cheat, threaten, and manipulate you to be successful and survive." Anything can be justified depending upon whose perspective is being used, and the amount of money applied.

Please don't mistake my remarks as a plea for sympathy for land owners locked into shady deals. Those deals were ultimately our fault, and we must take responsibility. But, we are learning at a rapid pace these days, and it will be more difficult to conceal knowledge, scare land owners, and manipulate the truth. Those are three of O&G's best and most used weapons. We, as land owners, will hopefully make more educated decisions and fewer mistakes. I think we all want the play to succeed, for obvious reasons. What part of the success we actual land owners enjoy is up to us. We have to observe the past to understand and manage the future. Go check out the Canfield Fair. The carney's are still barking out the same lines their predecessors used years ago to manipulate people. It's just their job. Some are really good at it. Some of us learn not to listen to them.

Nothing you have said I disagree with. I just want to point out that once in a deal it isn't often economic to go to court in hopes of undoing a bad lease. These are contracts and judges are loathe to change contracts.

I monitor legal activity in our state for NARO-Arkansas chapter. So I will end with one last old war story.  A few years ago I was hired to value minerals at the edge of the Fayetteville play. The client complained bitterly and never paid me claiming it had to be worth a lot more.  He also had leased some property for about $300 an acre under forced integration, and nearby the state struck a deal with a driller at a much larger fee.  He sued the company claiming the offer was "below" market. He pointed to the deal with the state. Since force pooling applies in the state but only to private parties, the state cannot be force-pooled. He lost. He appealed. He lost again.

I am confident that he spent more money on the effort and appeal than he would have made over the amount of "damages" he felt he was owed.

And one last dumb thing NOT to do.  When leasing stretched far beyond the boundaries of the Fayetteville shale, there were people who not only leased for far above the real worth of the lease, they turned around and spent that money on stock in some fly by night drilling outfit who leased it.  One spent $60,000 he got from the drillers and two years and several dry holes later, that company filed bankruptcy.  Double or nothing has two possible outcomes.

Thanks LERRET. Good advice. There is, of course, a fine line between being too wary and making effective decisions. The last scenario you describe might be a decision some face in the future in our young play. I like many others have worked too hard to bet more than a beer at a time on some outcome. Hearing about real life situations from people in the field, and how those deals turn out, helps us to learn. I will add it to my personalized, and personally earned, list of dumb things not to do.

I realize that it is our own fault  most of us fell for all the jarb they where throwing at  us  and we all can complain to the cows come home. We need to fight fire with fire

And keep letting  people  no there litlle tricks and lies to start.

only sign with good companys  and I am shure the people that are not having problems would share there names. Like south western .is one of the good guys I wish I was signed with them   I could only dream  lol 

I think it is all in the lease, not who you sign with, I didn't have a choice, my property was leased already when I bought it. The Original lease was with M& B Operating. After I bought the property they transfered it to Great Lakes, who transferred it to Range, who transferred it to Enervest, who entered a joint development agreement with Chesapeake. So even though my lease is with Enervest, who seems to have a reasonably good reputation, I will get royalties from and have to deal with Chesapeake who has a very bad reputation. Once you sign the lease don't count on anything else. Who actually drills is beyond your control.

Brain I agree I signed with chief who sold aportion to chp and 10 other people that I now have to chase it is a big shell game cj

Thank you both with your passionate well educated responses. I hate the 3rd grader bashing that goes on here. I signed a lease 4 years and 8 months ago. I received 1500 a acre and 12.5. I heard a lot of leases that were worse then mine. My lease is set to expire in January and I'm hoping to resign or negoitate with another company. I believe my location is worth a lot more. My property is located on the wetzel Tyler wv county line with the majority in wetzel. There is wet gas in the Devonian and Marcellus in this area. Still waiting on the Utica dry results at the Tyler test well but being about ten miles from the staddler well I assume that it will be decent. I would like to try and approximate the amount of money all three wells will make and try to negotiate and bonus and. percentage that reflects what I hope to make. Obviously there are a lot more variables that go into this.

I just think there is a lot of money for both sides if done correctly. None of us want to feel like we got screwed. It was my fault the first time for not knowing more information....heck...back then no one heard of the Utica and I could barely spell Marcellus. It will be different this time around and I am looking forward to it. Those Utica results couldn't come any quicker.
Correction. Meant to say all three layers. Not wells

OK so you did everything right, got a bullet proof lease, a bonus, a good royalty.

Now what are you going to do when your driller has discovered it pays to never pull your lease out of the file, and begins showing one corrupt move after another on your royalty statement. Hey You Can't Do That!

Those Natural Gas Liquids we removed from your well were of poor quality so we didn't sell them and didn't pay you. That oil wasn't up to standards, those negative signs we threw in on your statement are an "ADJUSTMENT" that takes your royalty and makes it our profit, and there is nothing you can do about it!

YOU GET NOTHING!! AND GUESS WHAT, YOUR STATE WILL DO NOTHING TO HELP.

Please ignore that part in your lease where we said we would abide by the laws of your state, we are LAWLESS!

Excuse me for bursting your bubbles. Your producer will do it later if I don't.

Jason

Check and make sure that your lease doesn't have a renewal in it. I will never sign a lease that renews and I won't sign a lease that has not got an absolute "Drop Dead" date.  That is, I don't want them to pull in the day before the lease expires and doze a hole in the fence and claim that stops the clock.  I would tell them that the permit must be approved prior to drilling AND a rig capable of completing the hole is on the site and being operated.  90 days after the end of the term, the well must be actively drilling and maintain that until the end.

Ron

A particular company can "screw" you.  The idea that the they all do isn't correct.  Some lease provisions are not plain. People disagree. But there are clauses that can be placed in these leases. You just have to do before hand. One is that you have the right to audit and they have to provide accurate information. And they PAY for the audit if errors are found. 

But filing a class action is expensive and a long shot unless this is just a slam dunk. Arkansas is considered relatively "friendly" to class actions but I saw one fall apart recently over the injection wells that appear to have triggered earthquakes and damaged people's houses.

It will be refilled likely in a federal court perhaps...and in doing so cost the plaintiffs even more.  Contrary to your assertion, we are very lawful...too much so, because these laws often put a very high burden upon the plaintiff to have real evidence and facts.  Some mineral owners don't have much clout and class actions are very hard to get before a judge and jury.

And the AAPL (landman's professional society) needs to tighten up their ethics rules to insure that no landman can claim they will force pool or integrate you if you don't sign a lease. But in states without force pooling, you have no guarantee you will not be surrounded by leases and left without a well.  There, groups of landowners must unite into a single entity and assure that they get leased and treated as one pool.

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