I'm not getting any "love" from the Live Oak County forum group, so if any of you have some time to waste, I would appreciate it if you would look over this lease for me and let me know what parts are NOT acceptable. I will have to send this in 3 attachments due to the size. Here's pages 1-3. Many thanks.
1021-LiveOak0001.pdf (540 KB) 1022-LiveOak0002.pdf (674 KB) 1023-LiveOak0003.pdf (682 KB)Here are pages 4-6.
1018-LiveOak0004.pdf (668 KB) 1019-LiveOak0006.pdf (257 KB) 1020-LiveOak0005.pdf (640 KB)Jan
I will try to look at this lease more closely later - may take a couple of days. But first off I personally think the 20% royalty is too low - should look to get 22.5 to 25% royalty.
I am sure that the people you are talking to will tell you that this is a dry gas area in the Eagle Ford (which it is) and is therefore less valuable that what is present north of you near the county line, but 20% is still too low (IMO).
More later
I see that the group you are working with is from Louisiana - which is not uncommon but still a bit out of the ordinary.
You need to try to find out who they are working for - leasing to a poor operator or an operator who has no Eagle Ford / horizontal experience is just as bad as signing a bad lease.
Again, just my opinion
Jan,
I pulled up the Abstract on the RRC GIS viewer and I think you might want to confirm the name of the survey as the RRC calls it Everitt as opposed to Everett. Several wells producing gas.
the lease pages you showed are net of costs which is detrimental to you.
How much net acreage do you have, does your ownership cover the full 50 acres, do you have additional acreage adjoining this tract and I agree with Rock Man that 20% is too low for me. I wont do a 20% deal and will not do a deal that is net vs. gross on the royalty.
Doug
I agree totally with Doug - netting will hurt you a lot here since you will get dinged for compression, pipeline transport and who knows what else.
The only thing that should be netted are the normal production taxes for O&G (you cannot avoid them).
This sounds like a "flipper." Here's a blurb from their website:
Angelle & Donohue Oil and Gas Properties is a full service land firm that provides a wide array of title and acquisition services to clients in various industries across every region.
There is no other name as to operator on lease.
No doubt they are working for an operator. You need to ask them directly who they are working for - they will probably not tell you but you never know
A&D are a very reputable broker group based on my personal experiences
That's good to know about A&D. Also, I'm thinking of asking $600/acre with 25% royalty. Mainly though, I don't want to pay for their costs (or at least the ones that I can avoid) to operate.
I'm so impressed with you Henderson County folks. You guys are the best.
Jan
Looks like A&D has been leasing in this part of Live Oak Co since 2011. Including your survey.
Over 1000 leases on file under their name as per DrillingInfo site. Some with reported 25% royalty terms (rare to see royalty info). Based on cross correlating A&D's activity versus drilling activity, I would bet that they are working for Pioneer.
Attached is map showing their activity (purple dots in surveys that have filed in) plus list of leases. All show 2 year extension options
1015-ADleasesfiledforLiveOakCo.pdf (17.9 KB) 1016-ADmap.pdf (636 KB)Thank you
Here's the Henderson County lease. It is in the tiniest type face, but it appears to be a more fair lease than the other. Again, if you guys could take a look, I would appreciate it. This one is worth much more than the 3 acres in Live Oak County.
Jan
1012-HendersonCty0001.pdf (710 KB) 1013-HendersonCty0002.pdf (1.03 MB) 1014-HendersonCty0003.pdf (471 KB)Just got an email about the Live Oak lease and they have backed it down to $150/acre, so I declined. Forget about that one. The Henderson County lease is still in play as I heard from landman last Thursday.
Sorry to put you through this, but I'm keeping all your info in case Live Oak comes back into play.
Jan
Just got an email about the Live Oak lease and they have backed it down to $150/acre, so I declined. Forget about that one. The Henderson County lease is still in play as I heard from landman last Thursday.
Sorry to put you through this, but I'm keeping all your info in case Live Oak comes back into play.
Gas prices make your Live Oak Co block pretty marginal right now - all the EF wells in that area are very dry with little NGL content
When do they say they intend to drill? my lease has the following on royalty:
Royalty Payment. Lessor reserves for itself, its successors and assigns, the following royalties and Lessee, in consideration of Lessor’s granting of this Lease, shall deliver same to Lessor as follows.
Delivery and Payment. As royalty, Lessee covenants and agrees:
(i) to deliver or cause to be delivered to the credit of Lessor, into the pipe line or other receptacle to which Lessee may connect its wells, one-fourth (1/4) of all oil, condensate and liquid hydrocarbons produced and saved by Lessee from the Leased Premises, or from time to time, at the option of Lessor, Lessee shall sell Lessor's share of such oil, condensate or liquid hydrocarbons with Lessee's share and shall pay Lessor one-fourth (1/4) of the Gross Proceeds (as hereafter defined) received by Lessee or any Affiliate of Lessee (as hereafter defined) from the sale of all oil, condensate and liquid hydrocarbons produced and saved from the Leased Premises;
(ii) to pay Lessor on gas and casinghead gas produced and saved or used from the Leased Premises
(1) when sold by Lessee in an arms-length sale to an unaffiliated third party, one- fourth (1/4) of the Gross Proceeds received by Lessee from the sale of such gas and casinghead gas, or
(2) when sold to an Affiliate of Lessee, one-fourth (1/4) of the Gross Proceeds, computed at the point of sale, from the sale of such gas by such Affiliate of Lessee; and
(3) when used by Lessee one-fourth (1/4) of the market value at the point of use.
(iii) to pay Lessor on all other minerals produced and marketed or utilized by Lessee from the Leased Premises, one-fourth (1/4) of the Gross Proceeds received at the point of sale.