Hello!
Chesapeake leased our family land back in 2006 to 2009. They pulled out of the area quickly and failed to provide my mother-in-law with documentation of their test results, the lease agreement said that they would do so. Is anyone familiar with what happened to Chesapeake during this time frame? If we were to attempt to retrieve that documentation now, does anyone think that would be possible? Do companies keep information passed 5 years?
Thank you!
Did they drill a well on your Mother-in_law's property or conduct seismic testing that you are aware of?
what state and legal description would help
Bertram,
No well but they did begin testing. Not sure exactly the methods that were used. She isn't able to tell me either. She leased the land and let them at it but didn't really monitor it as there was a pretty big family emergency that occurred around the same time.
Michael,
Sorry, I thought I had included it for some reason. It is the JC Teague Survey, A83 in Houston County, Crockett, TX. She has full mineral rights on just over 28 acres but the total acreage of the survey (all still within the immediate family as well) is about 110.
Thank you!
Bertram Sippy said:
Did they drill a well on your Mother-in_law's property or conduct seismic testing that you are aware of?
It sounds like good crude oil prospect. Perhaps the best way to go forward is to find another exploration company that is working in the area and go for a new lease. They can research the test results if any type of permitting is required for running seismic and often that information is for sale to other companies who request it. See about a land man in the area and ask if he is or knows someone buying any leases there. If you get any good responses, let me know I will review the lease specifics for you.
I am worried that going hunting for an exploration company might harm the type of deal we might potentially get if someone were to seek us out instead. Is it more beneficial to wait or be aggressive and offer our land?
Thank you so much for your replies and advice! We are surrounded by well permits that are getting approved and we hope they close in on us but we want to be ready and informed!
Find out who is writing the leases and what exploration companies are permitting these wells. You will get a good deal for the lease. Lease bonus money is good, but the real money is in an producing well on your land.
Make sure all the family is on the same page and that you know who owns what fractional interest\net acreage. A company needs all the acreage for a drilling unit. A decent bonus for Texas is 500.00 per net acre and a 3/16 royalty or better AND a drilling commitment on YOUR description. If you cannot get a lease bonus in that area, then recall that the drilling commitment is worth much, much more. Also a short term of lease means more actual dollars. 3 year term, 3/16 to 1/5 royalty and MUST drill well on YOUR minerals with in 12 months or lease terminates. Only in Texas, Oklahoma and North Dakota can folks command those terms. Thank the Lord for Texas geology.
Dear Jessica,
I am negotiating a lease in your county right now. The first offer was $450 per acre and 1/4. The bonus will go up from there and the lease form will be very landowner friendly.
By the way, bonus dollars are location dependent in Texas. It is a very big state. My high rate last year in Texas was $7500 per acre, 26.5% and a huge lease form. I mention this to illustrate that what one landowner might find acceptable, another will refuse. The landowners who set the "going rate" are usually the un or under represented landowners who jump at the first offer.
Best
Buddy CottenBertram Sippy said:
Find out who is writing the leases and what exploration companies are permitting these wells. You will get a good deal for the lease. Lease bonus money is good, but the real money is in an producing well on your land.
Make sure all the family is on the same page and that you know who owns what fractional interest\net acreage. A company needs all the acreage for a drilling unit. A decent bonus for Texas is 500.00 per net acre and a 3/16 royalty or better AND a drilling commitment on YOUR description. If you cannot get a lease bonus in that area, then recall that the drilling commitment is worth much, much more. Also a short term of lease means more actual dollars. 3 year term, 3/16 to 1/5 royalty and MUST drill well on YOUR minerals with in 12 months or lease terminates. Only in Texas, Oklahoma and North Dakota can folks command those terms. Thank the Lord for Texas geology.
Jessica,
You may want to let Buddy find you a lease and let him have a portion of the bonus as determined. Contacts in the industry go a long way. He also could likely research the geology of your acreage and adjacent land.
Good Morning!
Thank you so much! There is so much information to process but it definitely helps to know where to start so that if we are sent offers we know what we should expect as reasonable offers and I have started researching the companies that permits are being approved for. My other concern is the integrity of the company. Chesapeake disappointed my mother-in-law in the end and I while I know they are in it to make money for themselves, I also know there are some companies that still value their property owners. I have heard/read a lot of negative things about Chesapeake after the fact.
My biggest is concern is that we get the ball rolling and they don't find anything on the property. I hate to advise my mother-in-law to make the first move and hire attorneys and landmen just to find there is nothing there. I am worried that Chesapeake didn't find anything and that is why there was no paperwork and no action taken to drill at the end of the lease. This is why I was curious if we would be able to contact them and get the results of the testing they had conducted. It seems that maybe it will just be a waiting game for us until they, hopefully, close in on our area. They are swarming around Crockett and filling up the hotels so we will keep our fingers crossed!
Buddy, if she does choose to contact a lawyer, I will point her in your direction. From what I see you are about two hours from both her residence in Crockett and in Houston.
I appreciate the time you take to respond to my questions. It is all so new to us.
Thank you!!
Jess
Sippy,
I suppose every consultant has their own way of billing. Mine is generally just time. I have always thought that a percentage arrangement was always to the detriment of the landowner/client. We even have a new consultant (so called) on this board, who uses thin smoke and small mirrors to show you how his services will not leave you out of pocket. Wow. His example showed how you would lose potentially millions by using their service.
P.T. Barnum was right then and he is right now.
Bertram Sippy said:
Jessica,
You may want to let Buddy find you a lease and let him have a portion of the bonus as determined. Contacts in the industry go a long way. He also could likely research the geology of your acreage and adjacent land.
Dear Jessica,
Despite Sippy saying that it sounds like a good crude oil prospect, the closest production is right at 5 miles away and is Cotton Valley tight gas. There are no wells (dry holes, or plugged) anywhere near you. It may be years before someone approaches again and the acreage is certainly not marketable at the present time. As to other suggestions, you could get better advice at the Dairy Queen from the wise owls meeting every morning for coffee and biscuits.
In the business, the land is "pastureland" and nothing more.
Buddy Cotten
Bertram Sippy said:It sounds like good crude oil prospect. Perhaps the best way to go forward is to find another exploration company that is working in the area and go for a new lease. They can research the test results if any type of permitting is required for running seismic and often that information is for sale to other companies who request it. See about a land man in the area and ask if he is or knows someone buying any leases there. If you get any good responses, let me know I will review the lease specifics for you.
Buddy,
Thank you so much! That is the most straightforward answer I have received yet! That is pretty much the advice/information I was looking for, whether this was something we should actively pursue or not. I did not want my mother-in-law spending time, money and resources if it was not going to be a promising venture. Sounds like we will just enjoy the land for what it is. Thank you for the honesty! 
Jess
Pasturing minerals is one approach, waiting for a geologist to identify your property as a potential prospect. That could take a lifetime or could happen next week. I am a 4th generation land and mineral owner with holdings that go back to the 1920's, with an oil field named after us. I personally own a large amount of net acreage in several basins and I can say that I do not take the "pasture" approach. My minerals are my full time job now and the way I support my family, very successfully I might add. I do everything from buying more minerals, selling some of my interests and replacing them with others tax free, leasing them with other parties to exploration companies and land men, doing title abstracts and curative measure on my own and other's interests, and working along the entire drilling process from permitting wells, drill site legal opinions, forest service surface permits, and raising venture capital for working interest investment in new wells- on my own land. I don't suggest spending a lot of money promoting mineral acreage- phone calls, e-mails. reading maps, and following permits and past and present drilling activity is usually more than enough. One thing I know for sure is that you listen and learn from others in the industry all the time. I have some land that is not likely prospect and some that is, but it pays to be eternally optimistic.
Bertram,
The fact that my mother-in-law has been asked to lease before makes me hopeful someone will ask her again. I will continue to monitor the activity for her and if something happens than we will be ecstatic. We just won’t worry about spending money trying to make something happen. Thanks for that advice. Never hurts to keep an eye on things!
Jess