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October 22, 2007

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B. Humphries

October 10, 2007
What if I don't sign a lease?
We received an e-mail recently from a reader who wanted to know what happens if he simply refuses to sign a lease when most landowners around him have signed. Could he be "force pooled" into the lease?

Here's a recap of some information we received from the Texas Railroad Commission concerning that situation:


First, Texas does not allow “forced pooling” for what is called “primary production.” Primary production is the initial drilling and development of a field. The Barnett Shale is under “primary development” now.

Texas does allow forced pooling for “secondary production,” an example of which is when water is injected into an older reservoir (called waterflooding) to boost production.

Oklahoma, by the way, does allow forced pooling for primary production.


Regarding the lease: A landowner who does not sign a lease cannot be forced to participate in a lease. The unleased property may not be included in the operator’s lease acreage when applying for a drilling permit. (This could present a problem if there are a number of unleased properties in a small area, since the operator might not be able to put together enough contiguous acreage to allow a well.) In addition, the well bore may not pass directly beneath the unleased property, and it must remain at least 330 feet from their property line. If it comes closer than that, the operator must ask the Railroad Commission for an exception to this spacing rule. The unleased property owner could protest the exception, and there would be a hearing.

Finally, if a landowner does not sign a lease and the well is drilled anyway, the landowner may then ask to be included in the lease. If the operator refuses, the landowner may petition the Railroad Commission to be included in the lease.


-- Jim

Posted at 11:55 AM in Leasing | Permalink
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"In addition, the well bore may not pass directly beneath the unleased property, and it must remain at least 330 feet from their property line."

If the well bore must be 330 feet from the property line doesn't that in itself prohibit passing directly beneath the property?

Posted by: Curtis Franklin | October 19, 2007 at 12:03 PM

Good Point Curtis. This can include encroachment by the drilling
company's on the outer limits of a neighborhoods lease agreement
due to the associations demands, stipulations and the concessions
made by the leasing company's to the associations for their leases.
No truck traffic in their neighboorhood ? who's neighborhood will
it be in then? no pipelines running thru their neighborhood, then
who's ? No noise in their neighboorhood ? then who's? To give all
these concessions to a select neighborhood association and a mega
bonus, who is going to be violated in a big, hugh way for these
wells on their royality payroll to be drilled ?. Who's leases are
going to be violated for the benefit of a few? who's quality of life
and property values are going to be violated for the select few who
demanded and got all these concessions? When drilling like this is
done in the country, on someones fence line, and is bored under a
property owners fence to steal the minerals from your neighbor, is
when you go to town and have your attorney shoot off a letter to the
RailRoad Commission for illegal encroachment. People, watch your
back, nobody will do it for you.

Posted by: B. Humphries | October 19, 2007 at 05:12 PM

Good Point Curtis. This can include encroachment by the drilling
company's on the outer limits of a neighborhoods lease agreement
due to the associations demands, stipulations and the concessions
made by the leasing company's to the associations for their leases.
No truck traffic in their neighboorhood ? who's neighborhood will
it be in then? no pipelines running thru their neighborhood, then
who's ? No noise in their neighboorhood ? then who's? To give all
these concessions to a select neighborhood association and a mega
bonus, who is going to be violated in a big, hugh way for these
wells on their royality payroll to be drilled ?. Who's leases are
going to be violated for the benefit of a few? who's quality of life
and property values are going to be violated for the select few who
demanded and got all these concessions? When drilling like this is
done in the country, on someones fence line, and is bored under a
property owners fence to steal the minerals from your neighbor, is
when you go to town and have your attorney shoot off a letter to the
RailRoad Commission for illegal encroachment. People, watch your
back, nobody will do it for you.

Posted by: B. Humphries | October 19, 2007 at 05:17 PM

With all the drilling leases being sort after we in Collingwood, Arlington are being separated and preyed upon. The bonus money is low because the Gas Co.say the lack of interest by other Companies and our fellow residents.I would like to know if you know of any interest in drilling in the Madlock, Cooper area?
Thanks

Posted by: Otis Bowden | October 23, 2007 at 07:41 PM

With my New Mineral Lease Addendum, I'll be able to
squeeze more money out of the Lessee.

I ask for everything ... ( including the kitchen sink, almost ! )
Probably wont get everything but, it's way more than what anyone
else will be able to get !

So, my proposal to you is this;

If I can get you more money than you
would get leasing the minerals on your own
even by giving me 1/2 interest in the minerals,
would you do it ?

Gee ! ... Let me think ! ... Duh ! ... That's a No Brainer !

I can.

The biggest possible way is thru negotiating the
"Royalty Fraction" %.

Other Ways:
_ Bonus per acre
_ Better Lease
_ Shorter Term
_ Bigger Renewal Bonus
_ Bigger Royalty
_ Bigger Shut-in Royalty
_ Defining "The Royalty"
_ Get the Oil-Gas Co to take all the liabilty.
_ Have some control over any assignments of the lease.

Jees ! ... I ought to be in advertising !


Whatayathink - Whatayathink ? Huh ?

TIME IS OF THE ESSENCE !

My Landman contact, said that now is the time
due to competition in all of the Hot Tarrant County
areas !

And ... I know whos paying the most and
how to negotiate for more money !

Dont sign a lease without talking to me first !

David Boles
mineralman31@yahoo.com


Posted by: Mineral Man | November 11, 2007 at 08:29 PM


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Comments:

B. Humphries

BC & Cyber man--Read "what happens if I don't sign a lease" in this
blog. Review the Railroad commission website on this issue.

you 2 post like a couple of junk yard dogs. what are you afraid of?

Cyber man

BH, wrong, wrong, wrong. First off, law states all you have to be is 330 feet off lease or property line. You cannot petition TRRC.

Stop practicing law without a license. Are you aware you can go to prison for that or do you care?

My God, there is just such idiot statements and information on these blogs. We have placed stupidity in the hands of an informed few.

BC

WRONG WRONG WRONG. RRC has nothing to do with this situation! Anyone can clear tress on land they own, developers do it all the time. Mr. Leonhardt chose not to participate, so he is out of luck. Goes to show that not signing a lease doesn't prevent anything from happening except receiving a check for the next 20 years.

Don Young

Michael- I would appreciate it if you would send some photos and more details about your situation to fwcando.org. I'll post them on the website for all to see. Thanks.

B. Humphries

Michael, since the damage has already been done and the wells in
you can petition the railroad commission to make them pay you a
royalty, and if its that close to your house, i would make them
pay you for surface damages. Go to the Railroad commission website
for the Barnett shale.

Michael Leonhardt

I just have to comment on the "Mineral Hijacking of this county".
We live in Rendon and XTO have had several land men knocking at our door for signing mineral leases. Since most of the neighbors signed for 500.00 per acre I was not needed in the pool. It was my contention that the well would be too close to my house,so I did not sign. The well was drilled anyway about 400 feet from my house and I lived through hell for over a year and a half of constant mind boggling noise. They still are not done and Carizio Oil company now has started another series of wells about 600 feet from my bedroom. The noise is constant and very iritating. I feel sorry for ANYONE in Fort Worth that has one of these things within 1/2 mile of their residence!
The well they are drilling now is on a residential zoned 10 acre property that was designated for homes. Over 1000 oak trees and wooded property have been totally leveled and piled up of all places right over the 16 inch pipeline that was put in to move gas from several wells in the area. The pipline company destoyed at least another 5 acres of land for their use. Anybody wanting pictures of how must destruction is going on in this county with land and property can e-mail me. I have taken movie pictures and still pictures of everything that has been going on.
Good luck to all of you that think even 20,000 dollars a acre is going to be a good deal. You are going to be in for a rude awakeing!

Interested in Hiring Lawyer To File A Complaint

To Unfair and B. Humphries, how and when do we get started?

B. Humphries

to Unfair: The railroad commission regulates that all mineral interest owners have an opportunity to develop their fair share
of the mineral's underlying their property".

With this rampant unfair leasing practice's going on in this one
city, its time for a petition from all the owners of minerals who
have been Cheated on bonus money's for a lease agreement to make
a united complaint to the railroad commission. A group could even
hire a lawyer for this.

any interested people for this cause can respond in this blog.

Unfair

Count your blessings. We got $300.00 from Dale. Any attorneys out there want to take an "unfair leasing practice" case?

winston c. johnson

i live in windsor park off of altemesa and have been offered 5000.00 per acre or 750.00 per lot by dale property resources. this is an insult to me since i see other neighborhoods being offered 15000.00 per acre and 3000.00 per lot. i believe this low offer to us is simply because we don't have a homeowners association. there are still 52 units to be built before this sub-division is complete. so why the hurry for us to sign leases. its a pity that some of my neighbors have already signed for 600.00,. i may be standing alone on this but i feel we need to hold out and not be intimidated by this latest offer.

G. Giles/EHHA

WHAT IS OUR QUALITY OF LIFE WORTH? If we even got to $24,000 for the amount of land many of us have in Meadowbrook and Eastern Hills, about 1/4 acre and maybe up to about 1/3 acre....we would get about $6,000 to $8,000.

For those with an 1/8 of an acre...5,000 square feet, which is what most folks have for a lot size in many parts of Fort Worth, they would only get $3,000 if it got to $24,000 per acre. PEANUTS! When we take it down to reality, which is what we need to do...then even $50,000 per acre is not enough for what we will lose in the long run, while they make billions, and while our property values fall far lower than we will ever make on this. Think this through folks and add up the numbers....for me and many others, they just do not add up. What we are being offered is not near enough to make it worth while in the long run.

The acreage price sounds great until you break it down into the pieces of pie that we all have. We will never make anything close to what folks think they will. When they are hearing the price per acre...very few have an acre and when folks realize that we are sharing 25% in royalty payments with 160 to 340 other folks...that also substantially reduces the amount they get, which also relates to PEANUTS.

We are worth more than that by a long shot. I am not being greedy, it is just I cannot put a price on what my piece of mind, my health, my quality of life, and my neighbor's too at anywhere near where we are now. In the meantime, we get to see how all this pans out for the other neighborhoods that have signed and set toward being having active drilling in the next few months, see if the city is going to go against neighborhoods in allowing high impact wells, despite what we want, see what the city is going to do to allow on site dumping of waste, which the gas companies say is harmless.....it contains some very hazardous chemicals....frac pits close to where your children play....what is your piece of mind worth as far as they are concerned? In later years will you be glad you made the same choice? If we find out later that our cancer rate is higher, that there are chemicals that have leached into our precious acquifers, trucks that are spilling waste into our Trinity River, which by the way, Don Young found was happening just a week ago, despite denials. Look at more than the money, because in the big scheme of things, that money will seem paltry in comparison. Choose wisely and don't listen to hype. They want you to think that there is some rush to do all this. There is not. They are not going away....so WHAT IS THE RUSH to sign anything, except so that they can play poker with your leases and sell them to someone else? Every time that happens, and it does, they make a big profit, especially for those that thought they were going to miss out....they did...by signing! Our quality of life is worth far more than you think.

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