I received an Oil, Gas and Mineral Lease and Road Use Agreement for 40 acres l own in Beauregard Parish, LA. The leases call for a 3 -year period along with other stipulations. Several family members own this land and we each got separate leases. Can anyone tell me the going rate of leases for this area? Should I speak to or have a lawyer look over the papers? And, what happens if some family members sign and others do not, or all family members are required to sign? Is the Haynesville Shale profitable right now? And, what determines the price paid per acre or do you pretty much get the best deal you can? I inherited this property and as you can see I'm pretty ignorant as to how to proceed, where to turn to for information. In addition, I do not live in Beauregard Parish; thus, I need to collect as much information as I can.
James,
I would think down in Beauregard it is probably not Haynesville, but likely Austin Chalk formation or other. So the bonuses and terms may differ some from what was used in the Haynesville to the North of this.
Just to hit some of your questions:
If some family signs and others do not, it is not a big problem for the company seeking to drill (depending on the size/location of the tract) but they probably would prefer 100% and may stipulate that in their offer.
I would have to know your specific Sec. Township and Range to form an opinion on what a bonus there would be worth, and then check any production numbers from surrounding exploration. Many things determine price per acre for a company to offer, but generally the existence or non-existence of competition and previous or adjacent leasing and drilling will peg them to a certain range. You do have the power to get the best deal possible, but your bargaining power also depends on many factors including those named above and also your size and location.
let me know if I can be of further help.
Thank you for replying to my questions. However, you presented me with another question - just what is the Austin Chalk formation - is it the name of just another Shale? And, why are all these areas given different names.
But to reply further to your response, my land contains 40 acres in Northeast quarter of the northeast quarter (NE/4 of NE/4) of section 9, township 6 south, range 13 west, Beauregard Parish, Louisiana. Tract is being bounded now or formerly: North by Robert B. Dunning Estate, east by Grant Hennigan, et ux, and Thomas Grant Hennigan, South by Linda L. Rhodes, et al and West by Columbia Land & Timber Co., Inc.
Question: Is this tract part of the Austin Chalk formation; and, it appears is bound by some prior committment of someone's estate, that I'll need to look up.
In addition to the oil and mineral lease, there is a road use agreement. Are these standard? and separate from the royalties for oil and minerals?
J. Powell said:
James,
I would think down in Beauregard it is probably not Haynesville, but likely Austin Chalk formation or other. So the bonuses and terms may differ some from what was used in the Haynesville to the North of this.
Just to hit some of your questions:
If some family signs and others do not, it is not a big problem for the company seeking to drill (depending on the size/location of the tract) but they probably would prefer 100% and may stipulate that in their offer.
I would have to know your specific Sec. Township and Range to form an opinion on what a bonus there would be worth, and then check any production numbers from surrounding exploration. Many things determine price per acre for a company to offer, but generally the existence or non-existence of competition and previous or adjacent leasing and drilling will peg them to a certain range. You do have the power to get the best deal possible, but your bargaining power also depends on many factors including those named above and also your size and location.
let me know if I can be of further help.
OK, that helps out. Some past wells and this one new one in the area have been targeting the Wilcox Sands. This new one just west of your land seems to be a very deep Wilcox by Century Exploration Houston. It is a lease based well on Columbia and they began drilling very recently.
To answer your question, Haynesville, Austin Chalk, Wilcox, etc.. are just names of formations and there are many productive formations.
I will send you a message to address the other questions you posted.
James:
Last year at this time leases were going for $200 per NMA on a 1/5 royalty in Northern Beauregard. There are multiple formations in this area that companies are looking at.