Just curios if anybody would like to comment on the possibility of not leasing when I own just a couple of mineral acres in a section.
Would it be completely foolish to entertain the Idea of participation. For example 2 net acres on a 10m $ well would be about 15 grand exposure.
Just throwing it out there for comment. I know it would probably be a legal nightmare.
If you did participate, I would strongly insist that you create a company and lease or put the minerals into the name of the company. Otherwise if something goes wrong, you will be personally liable for the damages. I do not know whether the operator still markets the oil and gas or if you are responsible for taking the production in kind.
Hi Lynn-
Wondering if you ended up participating. I'm looking at promoted opportunities to participate and am trying to gauge others' experiences to minimize the chances that I might get burned.
Cheers,
Bret
When you say "participation," do you mean actually putting up your pro-rata amount of the investment in drilling the well, or do you mean becoming a "non-consent" owner, whereby you do not invest directly in the well but receive a higher return on your minerals after payout? My guess is that very few operators will want to agree to the former, and if you agree to the latter you might actually forego alot of money that you would otherwise earn if the well is average or below average in production, at least if the well is for natural gas, I'm not sure about crude oil.
And I guess it depends upon alot of other factors. For example, if I had a comfortable financial status, trying to participate probably would be my choice. I saw several doctors and lawyers do that with some of my clients. Or if you are a senior citizen and want a steady return, you probably ought to just sign the lease and take the regular royalty payments. Lots of other reasons to consider.