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re: MUST a landowner lease land to secure royalties...

Posted on 3/4/12 at 5:19 pm to
Posted by TigerDog83
Member since Oct 2005
8276 posts
Posted on 3/4/12 at 5:19 pm to
quote:

Actually the operator is entitled to recover drilling costs X2.


In LA the unleased mineral owner only has to wait until the costs to drill and complete are recovered. Working Interest owners who go non consent have to wait until 300% of the costs are recovered, as the law was changed a few years back moving this up from 200%.
To the op: Some operators will "operate these interests to death", though and it would be risky to not lease. Leasing essentially takes all the risk off the table. If you choose not to lease, you could potentially cause the well not to be drilled should you have enough acreage to make the operator not want to carry you. By leasing you make money even if the well never reaches payout. By not leasing you will get statements you can't understand and will be facing an uphill battle getting any information out of most operators. Also the operator will not view you favorably and you will make an adversary out of most of them in this situation. I personally think LA needs to raise penalties for unleased mineral owners who refuse to lease higher than the current 100%. Some landowners can and are stalling development by not leasing. Arkansas can be as high as a 500% risk premium and wells get drilled regardless. With your 2 acres that's not going to make you a tremendous amount of money either way so you might as well lease and remove the risk.
This post was edited on 3/4/12 at 5:25 pm
Posted by gonads&strife
Member since Dec 2011
1885 posts
Posted on 3/4/12 at 11:31 pm to
I stand corrected, I forgot the risk charge didnt apply to unleased min owners.

On the other hand, I'm against forced pooling and your proposal is essentially creating that scheme with huge penalties. If someone doesn't want to lease that's their prop and their right.
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