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EvrybodysAllAmerican
LSU Fan
North of the Trump Wall
Member since Apr 2013
5267 posts

Anyone have Oil lease experience?
An oil company is interested in leasing some property from my mom.
They're offering $300/acre and 20% of whatever they make from it. (It's only about 10 acres.)

Anybody know if that's a good or bad offer? Can you negotiate it or is it a take it or leave it deal? I don't know of any other company interested.

Property is near Springfield, LA if that helps. Thanks.
This post was edited on 2/1 at 1:53 pm


barry
Cincinnati Fan
Location, Location, Location
Member since Aug 2006
46188 posts

re: Anyone have Oil lease experience?
quote:

Anybody know if that's a good or bad offer?


Considering the area you are in, any offer is good.

quote:

Can you negotiate it or is it a take it or leave it deal?


You can negotiate and there is no real risk seeing as we are talking about 3000 bucks.


EvrybodysAllAmerican
LSU Fan
North of the Trump Wall
Member since Apr 2013
5267 posts

re: Anyone have Oil lease experience?
Good point. I guess I was thinking more of negotiating the % higher and becoming the Beverly Hillbillies.


barry
Cincinnati Fan
Location, Location, Location
Member since Aug 2006
46188 posts

re: Anyone have Oil lease experience?
quote:

I guess I was thinking more of negotiating the % higher and becoming the Beverly Hillbillies.


At 10 acres you could negotiate 100% and you wouldn't be the Beverly hillbillies.

You are more likely to get up the /acre price than the royalty.

Ask around neighbors and see what they got.


cwill
Member since Jan 2005
37637 posts

re: Anyone have Oil lease experience?
That's not a bad offer. If you push on anything push on the royalty side. I'd guess you're being leased for Austin Chalk. I know EOG is broadly in that area as well as some smaller competing companies and an army of lease flippers.


EvrybodysAllAmerican
LSU Fan
North of the Trump Wall
Member since Apr 2013
5267 posts

re: Anyone have Oil lease experience?
Haha, will do. Thanks!


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EvrybodysAllAmerican
LSU Fan
North of the Trump Wall
Member since Apr 2013
5267 posts

re: Anyone have Oil lease experience?
Thanks, I guess that answers my questions. We don't have any knowledge about it and just wanted to make sure she wasn't about to sign something ridiculous.


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barry
Cincinnati Fan
Location, Location, Location
Member since Aug 2006
46188 posts

re: Anyone have Oil lease experience?
quote:

If you push on anything push on the royalty side.


Really? I thought 20% was already pretty solid. I'll leave it up to you as this is your area of expertise.


Marlbud
Member since Jun 2017
550 posts

re: Anyone have Oil lease experience?
They ain't drilling that, TMS is a hotter play when oil prices rebound. Get as much as you can up front.


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MadtownTiger
LSU Fan
Baton Rouge
Member since Sep 2010
3277 posts

re: Anyone have Oil lease experience?
Chalk is picking up pretty big in South LA. EOG doesn't f*** up much and they are killing it in the Permian and eagle Ford...I would push for royalties if anything cause they produce...if EOG are the ones leasing.

TMS isn't ever gonna do whole lot in South LA, it turns into a turbidite play and incredibly hard to hit and go lateral.

Helis bailed out so fast of 1088 it was ridiculous...barely spent enough time to log the well.
This post was edited on 2/1 at 3:34 pm


Marlbud
Member since Jun 2017
550 posts

re: Anyone have Oil lease experience?
I agree that there will not be much in S LA but there large reserve between Alexandria and Greensburg. Easier to access as well. Oil would have to go back to 140 for Austin Chalk to blow up. That being said, you are correct, EOG doesn't mess around.


iknowmorethanyou
LSU Fan
Paydirt
Member since Jul 2007
6086 posts
 Online 

re: Anyone have Oil lease experience?
She should be able to get 22.5% by asking, fwiw.


xrockfordf150x
New Orleans Saints Fan
Walker, LA
Member since Sep 2008
3041 posts

re: Anyone have Oil lease experience?
20% is a pretty solid percentage. Haven’t heard of much higher than that.


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MadtownTiger
LSU Fan
Baton Rouge
Member since Sep 2010
3277 posts

re: Anyone have Oil lease experience?
quote:

Alexandria and Greensburg


You're talking about TMS, I know the green zone is mid Louisiana into mid MS. Turns into turbidites further south into the Florida parishes. But its super deep there. Austin chalk is freaking deep as shite as well, think it's below TMS. Whole lot of money, plus you need to laterally drill to profit.

You're definitely right though $140/bbl at minimum of they ever touch it at all. TMS is a pain in the arse in general to profit.


fishfighter
LSU Fan
Baton Rouge
Member since Apr 2008
29710 posts

re: Anyone have Oil lease experience?
quote:

She should be able to get 22.5% by asking, fwiw.


This along with no fee towards transporting fee.

$310 an ac is the going fee here in lower Pointe Coupee. $10 per ac goes to lawyer fees.


Got a couple checks waiting for me to go pick up.


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Marlbud
Member since Jun 2017
550 posts

re: Anyone have Oil lease experience?
I think they would do more work in the Haynesville before they head to South LA.


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cwill
Member since Jan 2005
37637 posts

re: Anyone have Oil lease experience?
quote:


Really? I thought 20% was already pretty solid. I'll leave it up to you as this is your area of expertise.



It's a decent offer, but I think you could push for 22.5%....worst case is they say "no" and you take the $300/20%. I'll add, though, with 10 acres don't be a hardass...make a play for 22.5 but don't try to hold out or you'll end up being cut out of any producing unit and could ultimately end up stranded.


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Ham Malone
Arkansas Fan
Denver
Member since Nov 2010
1800 posts

re: Anyone have Oil lease experience?
You have basically no leverage with 10 acres, but it doesn't hurt to wait a bit. Stop by the courthouse some morning and take a look at the clerks office, if it's packed with landmen then you might get another offer. If it's three guys in there with old digital cameras, call that landman ASAP and get your check to the bank immediately.


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VABCHTIGER
LSU Fan
Virginia Beach
Member since Sep 2007
166 posts

re: Anyone have Oil lease experience?
LINK (The Go Hayneville Shale Forum)has some really knowledgeable people and has sub-forums for the different plays in Louisiana (and other states)


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cwill
Member since Jan 2005
37637 posts

re: Anyone have Oil lease experience?
quote:

Austin chalk is freaking deep as shite as well, think it's below TMS.


The chalk is above the TMS. The TMS is the source rock.


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