"I dont think so because after the well reaches payout the operator loses that income from the unleased owner and pays the owner 100% of their share of production proceeds minus production costs and supervision fees. With the leased owner they retain…"
"Could it be advantageous to a driller to allow a percentage of acreage go unleased so they could use the money they would have been paying out in royalties to be applied to the expense of the well? Especially since NG is so low priced?"
"You are correct, the option is their's if they would like to extend. Each section has its own unique set of financial circumstances so its difficult to generalize a yes or no answer on lease extensions and apply it to the entire Haynesville."
The extension is only a pre-negotiated option.
They an just let the lease go and hope to re-negotiate, of course it would open to anyone who wanted to lease. Or they can just let it go unleased. and force pool and drill the…"
"A well constructed lease would have stipulated the same payment for the extension. It does shed some light on just how expensive it is on the operator. Drilling and completion cost are betewen 11 and 12 grand per acre, plus up to a 20 grand per acre…"
"I am an UMO with Chesapeake. I didn't choose for it to be that way, but the day we were to meet with the Chesapeake rep a couple of yrs. ago, he called & said we are not going to lease anyone else in that section. This was a small acreage…"
""Leased premises" consists of both tracts. The well on one of the tracts in the lease, and keeps the lease alive. No need for lessee to pay for extension-lease has been extended by well on the other tract. 7, 8,or 9 tracts in a lease…"
Hello! I hope the site is a place for you to learn, network and contribute. My name is Keith and I started the site in June of 2008 to open up lines of communication between landowners. Since then, we have grown to over 10,000 members.
As exciting as this is, we know that we have a responsibility to do this thing correctly. After all, we want the farm to remain a place where the family can gather for another 80 years and beyond. This site was born out of these desires. Before we started this site, googling "shale' brought up little information. Certainly nothing that was useful as we negotiated a lease. Read More