My sister, brother and myself own 1/8th mineral interest each on 1,543.45 acres in LaSalle County. My brother and myself chose to go Co-Tenant route and my sister leased with Carrizo, getting a $20,000 bonus up front and just recently received her first royalty check of $5000. We also had the option of leasing with Carrizo and with XTO, but with only a $4,500 bonus up front (XTO). Choosing Co-Tenant, it is agreed that we would be receving a 100% royalty, vs 25% royalty had we chose to lease with Carrizo. As a Co-Tenant, I understand that we would be responsible in helping pay for all production, etc... and severance tax(7-10%; will be taken out before we receive first check) and I recently learned that our royalty may not be as much as we previoulsy thought, because getting to the end of producing, not as much pressure coming from the ground. XTO gave us the impression last year that we had to come to a decision rather quickly as to choose Co-Tenant or Lease. However, I have now learned we still have that option to lease. Why would XTO advise my brother and myself that they needed us to tell them what our decision is? Also, I emailed our contact with XTO in December, because I wanted to know what kind of activity was going on: "All 4 wells have been drilled, completed and still producing, no idea yet when payout may occur". They did advise us in August 2013 that wells will pay-out in about a year. So, I have so many questions, but my main one now is, is it in my best interest to continue being a Co-Tenant or lease with Carrizo? Also, XTO advised us in June 2013, that their plans are to drill the four wells on the SW part of our land, only on the combined 1543 ac tract and their "HOPE" is to come back after seeing how well the 4 wells produced and decide whether to drill more. Many of the future wells would cross onto the 2600 ac tract if they are drilled; they would then either use the pooling language in the lease which would allocate the production on a surface-acre-in-the-unit basis, or possibly comeback to us to get our permission to allocate production otherwise. They are investigating a relatively new practice of allocating the production based on the percentage of the productive length of the well that would fall on us.
What I've highlighted....If I choose now to lean towards leasing with Carrizo, will I still be included in the same type of pooling agreement that will be offered to one of our partners who are surface owners??
Thank you so mcuh,
Anne