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Was contacted today regarding oil & gas lease for some property I own. Anyone here know what the going rate on mineral rights lease and / or royalties is in LA?? Meeting with these guys on Friday and would like to be a little better than totally ignorant before then.
I've had a couple, but don't remember the rate. As I recall more than one company can do the leasing and one might offer more than the other. A couple of phone calls might get you more info. I'd try a land man from another company than the one that contacted you. Seems like there is a one time amount at first and then if the well produces you get a royalty.
My current one lasted a couple of years but seems to be drying up. I was making a whopping $34 to $38 a quarter on that baby! My last check was less than $1. Oh well, it's better than nothing.
Mike
__________________ They weren't biting at all.....then they slacked up.
I'm guessing this is for natural gas, much like all the drilling of the Barnett Shoal in Ft Worth Texas Area. I would research the percentages paid to the churches, HOA's, and property owners there.
The gas and oil under your land can be easily had by drilling from any adjacent property. Unless you have some really large piece of land where they could never access the reserve from anywhere but your property- it's unlikely that an oil/gas co would pay an exhorbinant amount to drill on yours.
I'd just see what they had to say and consider their offer and I would imagine that it's likely that you could get them to come up from their offer just a bit. Remember, they chose you for a reason, perhaps ease of operation etc... or perhaps other property owners said no, or tried for more money, etc... You may be in the drivers seat, but remember that they already know exactly how much $ is under there, and exactly how much $ it will take to get it out of there... and they are willing to pay a modest %.
In Texas, many property owners thought they were being shrewd by "holding out for more" and playing what they thought was hardball. They were dissapointed when the gas company simply goes down the road and finds a neighboring property owner who accepts, once they are drilling, they will get all the gas from that particular pocket reserve, they don't actually need your land to get it all.
BiB, I would listen to what they have to say the first time with a lot of questions but absolutely no decision until you get professional advice. Depending on what they want to do drill, royalties, access, etc there are a lot of variables.
Ken, they can not just slant drill under your property from a neighbors property and "steal" your minerals here in louisiana.
__________________
"Of all tyrannies a tyranny sincerely exercised for the good
of its victim may be the most oppressive." ~ C.S.Lewis
Yep. was aware of the slant drilling thing and don't even have a clue yet if they want to put equipment on my land. Just got off the phone with a fishing bud /attny who I had a call into and he seemed quite knowledgeable and experienced on the subject. So once I meet with these guys on Friday, I'll get w/ him on it. I've fished with this guy a bunch, worked on his boat and he's done most all my legal stuff for the last 7-8 yrs, but I never had a clue he had knowledge (and evidently quite a bit of personal experience) in this area 'til he returned my call a few minutes ago. Thanks guys!!!!
I alond with several neighbors were approached and asked about this and we all met with him. I think they were giving like 175 dollars to each head of the household. I got to aslking him how much possiblly we could make and he said he had no ideas, the wells would have to be paid off first then all other expenses then we would get our monely.. So being the ever intilecte i am i said whell what if they say the well cost 50 million dollars and there would be know more money to go around. he just shook his shoulders and said cant help you with that.. sooo go at your own gut feelin
My family gets 3/16 over-ride, or 18% of the well, on some old family land that my Dad and his siblings inherited from my grandfather, that has a few shallow oil wells on it.
They have a separate lease for 8000 ft and above, and another for below 8000 ft. As long as the oil company is producing oil, they can hold the lease. Since no oil is being produced from below 8000 ft, the oil company periodically has to re-new that lease. They recently signed an 18 month lease (for the below 8000 ft) with an oil company for 50.00 an acre and 20% of the well if they drill and hit. If no oil is being produced from below 8000 ft within 18 months, that lease runs out.
The going rate for around here is $35-$50 with a 18-20% after paying out the cost of a well. Problem is,you really need to talk to someone that knows about these things. Reason is that if a well is put on your place,doesn't hit and its a wildcat company,they will leave a big mess behine,leaving you the cost of clean up which can run into the millions of dollars. The 1980's around here was big time gas leasing/drilling and a few wildcats screwed up some land and left big time mess for land onwers to clean up were the Feds steped in and made them pay for it. OUCH!
In your lease,you have to protect yourself big time,so once you meet these people,get everything in writing,don't sign anything till you talk to a Att. Don't let them say that this is the only time they will contact you,pressuring you to sign. If they really want the lease,they will wait. Been there and I still have a few leases.Oh,some of my leases are for 18 months and some are as long as 5 years.
Happy for you. What I am interested in is where is your property? My last least on my 90 acres in Goudeau got me 27k. In northern leasing varied per acre last year. I heard anywhere from 5000 to 10,000 per acre. My brother has a friend who had just purchased 100 acres near Monroe and got a cool 1 million. I don't know if it was a lump sum for 3 years or was per year. Usually they lease fro 3 years.
My advice is for you to talk to large landowners in the area and they might know more about what is normal in your area.
Today, wells are placed on 960 acre blocks and all land falling in the area are counted in the well. It is already blocked off. The sate of Louisiana controls everything so you will never get ripped off on your royalties.
Also checkout the Louisiana oil and gas Association for real information as to what is real and not.35 and 45 dollars an acre was in the days of 15 to 20 dollar barrel of oil. When oil hit 150 bucks things changed. http://loga.la/index.html. This is their link. Let me know where your land is. My is in Avoylles Parish. I also have land in St. Landry. If they want you bad enough you can get ba lease on all your property even in another parrish. I have in the past.
Talk to others in your area. Get together. Don't be stupid. Negotiate.
OK. Met with the landman tonight. Here's the deal. 640 acre blocks. 4 blocks in the area they are working on. They are paying $400/acre for a 3 yr lease with an option to extend 2 yrs with another $400/acre. They have already selected a site for the rig and it's not on my property so no mess, but I could probably hit the rig with a thrown rock from my property. They did a lot of seismic surveying here a couple of years ago and seem pretty confident. The survey was done / paid for by BP. This co. bought the rights to the survey. If they hit, the royalty is 25% to be split among the land owners in the block.
To answer some of the other questions here, the property is north of Baton Rouge but still in East Baton Rouge Parish.
I will be passing all this stuff, including the contract along to my friend to look over. I will also be sending a copy of the contract to my older brother who is a contract attorney for Tejas Oil and Gas to look over.
For you guys who are knowledgeable in this area, does this sound like pretty good terms?
This site ROCKS. Can't believe how much knowledge is available on this subject at a boating site!! Thanks for all the help so far!!
25% is about as big of a royalty as you will ever see without participating financially in the well. the bonus sounds reasonable since you are not in the haynesville shale.
a couple of years ago I was approached on a nat gas deal w some prop i own in mississippi
numbers looked good until you looked at what they or their affiliates were charging. For example, we got a percentage of the price at the wellhead, but were responsible for costs to deliver from the wellhead to another point, and would be moving it thru a wholely owned sub that were going to charge us up the yeng
"all of your neigbors have signed already" was what I was told. I said good for them, didn't sign and they never did anything with the neighbors. If I can find the old web addresses that helped me with sifting thru their bs I will pass on.
ps.
did deals years ago with Shell Oil on a different prop that worked out well, so it is not that I don't like to make money.
I am a landman here in Alabama and would have to agree with miss trial, 25% it the best your going to do as far as royalty goes. As far as the bonus, it really depends on the area. I would advise to just talk to the mineral owners of neighboring properties and all agree on terms.
I will say, don't try and dance to much, agree on terms with neighbors and go with it. Remember the ultimate goal here it to hit a well and they can't do that without a lease.
One more thing, there will always be someone that gets more than you, so don't worry yourself too much about it.
__________________ 2007 Century 2600 w/ Twin 200's
Checked it all out as completely as I could. Had 2 attorneys go over the contract, talked to a friend who is a commercial surveyor and another local guy who is in the business. Both the surveyor and the oil guy were intimately familiar with the seismic survey done and both said it's "HOT". Based on all that, I went ahead and signed the deal last night. Got a check for $400/acre and we'll see what happens with royalties. The landman, the surveyor and the oil guy all told me that this well WILL get drilled... they are that sure based on the seismic survey. The landman said they are drilling in a nearby block now and as soon as that rig is available, they will be moving it here.
Kind of exciting for me, LOL. Never got any money for nothing before and my chicks were definitely NOT free!
In the end, if I get some money, great, if not, well I guess I'll just have to keep trudging along like I have been all my life.
Thanks everyone for all the replies and advice. You guys really helped me out here. Thanks again.
Mineral rights????? 
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