No Surface Access?

I was approached last week about leasing my land (about 80 acres, a few miles outside of Shiner). Never leased before, and do not actually live in Texas so I'm not really familiar with the process. I'm leaning against leasing the land, simply because I do not want it damaged in any way. A friend suggest asking for a "No Surface Access" clause. It sounds good, but can anyone tell me what the "cons" may be. Is there anything else I would need to ask for? Also, the company is offering $1500 per acre...is that the going rate? Thanks for any help/suggestions.

I will not address the offering per acre as I am not really up to date on the Bonus offers down there other than to say the first offer is usually on the low side of the going rate. As to the suggestion that you can include a clause calling for "No Surface Access" of course this is possible, but this limits you to only being placed in a Unit for production purposes. By placing this restriction on a potential Lessee you are limiting your options. The better idea is to utilize surface restoration clauses as well as damage clauses. Remember a successful well that includes all of your acreage in the Unit can be a life style changer. These wells are making hundreds of barrels of oil a day along with gas. Proceed carefully find an Oil and Gas Lawyer that can advise you on the contents of any lease and make damn sure all of your questions or answered to your complete satisfaction

R. Carl King, III

(Edited: Only a title or certification is allowed. No company names)

Paul Jay,

The $1500/acre offer is a fair offer but the more important area of concern is the royalty percentage. The landman will start out offering you 20% typically, but you should be able to negotiate for 22.5% - 25%. The bonus is used as the smoke screen and can be a nice bit of cash in the pocket but the royalty has longevity and should be the primary focus. Hiring a competent O&G attorney in this area now can mean less headaches, more income, and peace of mind later on. Also, a surface restoration clause is commonplace and necessary when leasing your property. Again, the best advice out there is to retain a competent O&G attorney. The production in this area is substantial and could benefit you financially a great deal. Good Luck!

LBS

Agree with others as the bonus money per acre, according to Penn Virginia & their July 2013 , investor presentation states offers of $1500 - $2000 per acre. The latest wells of which a few are located 2.6 to 4.9 miles noth of Shiner. These wells are as stated already producing most over 500 to 900 barrels per day. Some have produced less oil & higher mcl 's of gas per day. You may want to spend a little time online researching for additional verification. Penn Virginia has been working in areas northeast of Shiner. You may also look at Texas RRC. Available online as well. Good luck & hang on. Seek legal advice! You will be glad you did. Also look up members Wade Caldwell, & Clint Liles as both may offer you additional research options.

Miles

Thank you!

R. Carl King, III said:

I will not address the offering per acre as I am not really up to date on the Bonus offers down there other than to say the first offer is usually on the low side of the going rate. As to the suggestion that you can include a clause calling for "No Surface Access" of course this is possible, but this limits you to only being placed in a Unit for production purposes. By placing this restriction on a potential Lessee you are limiting your options. The better idea is to utilize surface restoration clauses as well as damage clauses. Remember a successful well that includes all of your acreage in the Unit can be a life style changer. These wells are making hundreds of barrels of oil a day along with gas. Proceed carefully find an Oil and Gas Lawyer that can advise you on the contents of any lease and make damn sure all of your questions or answered to your complete satisfaction

R. Carl King, III

Thank you!

Miles said:

Agree with others as the bonus money per acre, according to Penn Virginia & their July 2013 , investor presentation states offers of $1500 - $2000 per acre. The latest wells of which a few are located 2.6 to 4.9 miles noth of Shiner. These wells are as stated already producing most over 500 to 900 barrels per day. Some have produced less oil & higher mcl 's of gas per day. You may want to spend a little time online researching for additional verification. Penn Virginia has been working in areas northeast of Shiner. You may also look at Texas RRC. Available online as well. Good luck & hang on. Seek legal advice! You will be glad you did. Also look up members Wade Caldwell, & Clint Liles as both may offer you additional research options.

Miles

Thank you!

Laura Smothermon said:

Paul Jay,

The $1500/acre offer is a fair offer but the more important area of concern is the royalty percentage. The landman will start out offering you 20% typically, but you should be able to negotiate for 22.5% - 25%. The bonus is used as the smoke screen and can be a nice bit of cash in the pocket but the royalty has longevity and should be the primary focus. Hiring a competent O&G attorney in this area now can mean less headaches, more income, and peace of mind later on. Also, a surface restoration clause is commonplace and necessary when leasing your property. Again, the best advice out there is to retain a competent O&G attorney. The production in this area is substantial and could benefit you financially a great deal. Good Luck!

LBS

I agree with all the replies here. Make sure you get a good local Oil and Gas attorney. The offer that was made is right in line with what is being offered in this area. Just be careful not to play too much hardball with the oil company because if you lay out too many demands they may just back away from you and if they lease all the land around you and place those tracts in a unit, then you will never be drilled. I agree wholeheartedly with adding surface restoration clauses and the damage clauses in your lease. Our land is north of Shiner also. Good luck!!

Thank you!

Amy Berger said:

I agree with all the replies here. Make sure you get a good local Oil and Gas attorney. The offer that was made is right in line with what is being offered in this area. Just be careful not to play too much hardball with the oil company because if you lay out too many demands they may just back away from you and if they lease all the land around you and place those tracts in a unit, then you will never be drilled. I agree wholeheartedly with adding surface restoration clauses and the damage clauses in your lease. Our land is north of Shiner also. Good luck!!

I was also approached about leasing a partial interest I have in Lavaca Co. By any chance

does anyone have any information regarding current activity in or near the McLaurine Survey?

Thanks, Cindy