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Tractor Talk Discussion Forum

OT: gas leases

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PhilcaseinWPa

11-11-2005 13:40:04




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This is off topic but I can tie it to tractors by wondering if it would pay me enough to buy another one. Do any of you fellows have any experience with natural gas leases on your farms. Particularly with great lakes energy corp. this company has contacted me about leasing the gas rights on my farm. What are some things to look for in a good lease, to look out for in a bad one, or should i just ignore them.
i will have my lawyer look over anything before I sign it. thanks
Phil

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Rod M1

11-12-2005 17:34:21




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 Re: OT: gas leases in reply to PhilcaseinWPa, 11-11-2005 13:40:04  
Do you get stuck with the well and other garbage when or if it's abandoned?



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Mark - IN.

11-12-2005 03:47:06




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 Re: OT: gas leases in reply to PhilcaseinWPa, 11-11-2005 13:40:04  
Some years back, back in the late '70s and early '80s, oil companies were leasing land access from folks from like Kalamazoo, MI. down towards central Illinois to pump oil. Was kind've a cool setup. They put rigs and storage in the middle of fields (or where ever), and all the land owners basically had to do was go out and shut them down when filled to a certain level, and call it in, and collect $$$ for doing it. Then at some point it all just stopped. Not because the oil vein dried up, it just stopped. ??? Environmentalists? Regulations? I have no clue. But, there are rigs that have been settin idle for a couple of decades up on Adamsville Road northwest of me in MI, couple north of the Garver Lake area, one along Interstate 80 near Michigan City, IN. (that one's painted up pretty with some oil company's name on it).

I wonder whatever happened to all of that? I knew of a couple of guys that were allowing that on their properties. Back then were getting like $1K per month for shutting them off and calling the oil guys to come empty the storage tanks.

If you can do it.... is up to you. But, then again, since power plants, fuel depots and refineries and the sort are now considered "strategic" something or others under Home Land Security, you might open yourselve up to intrusions of... who knows.

Good luck, Mark

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Tx Jim

11-12-2005 03:29:36




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 Re: OT: gas leases in reply to PhilcaseinWPa, 11-11-2005 13:40:04  
Phil,my neighbors and I signed gas leases here in N.Texas a little over 5 years ago.No gas had ever been produced here, so gas companies offered little $$ per acre lease and 12.5% royalty. A few wells have started producing good amounts/day(1-4 mil.cu. ft.) so lease $$$'s and royalties have risen considerally($1000-1500/acre and 25%).This is in the East Barnett Shale formation. Sometimes the early bird gets the smaller worm. Gas Co. employees can't tell the truth because they are sent to LIAR"S COLLEGE for their PHD's so watch out!!!! Tx Jim

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CNESLER

11-11-2005 15:44:11




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 Re: OT: gas leases in reply to PhilcaseinWPa, 11-11-2005 13:40:04  
There are four parts to a lease
1 the bonus, 2 the term, 3 the royalty,
4 the lanquage. State laws differ but in Arkansas
the minimum royalty is 12.5%. Google for NARO
they have a forum that talks about mineral rights
and leases. Lease dont sell.
Good Luck
CNESLER



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Paul Allen

11-11-2005 15:01:56




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 Re: OT: gas leases in reply to PhilcaseinWPa, 11-11-2005 13:40:04  
I don't have any gas on my spread but I have worked in gas fields for quite a while. The lease itself can be a very profitable venture these days but I'd recommend that you spend some cash and get the opinion of a good business lawyer before you agree to anything and make sure that there aren't any loop holes. If you have any enviromental impact concerns or access questions it would also be a good idea to get these in writing as well. These companies are out for profit and don't always give the land owner the consideration that they deserve.

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mjbrown

11-11-2005 16:27:10




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 Re: OT: gas leases in reply to Paul Allen, 11-11-2005 15:01:56  
We signed one last year. They were all exited about the results of seismic survey they had done. They drilled two wells a few miles away down to about 8000 ft. and found gas but not the huge amounts they were hopeing for. They left and haven't returned.
Here in NY the leases and environmental stuff is tightly regulated by the DEC and the AG has jumped on them when he didn't like the lanquage in a few leases. It depends on your state how protected you are.Our lease expires in ten years. Royalties are 12.5% and 200,000 cu/ft per year for the land owners use. After the well is no longer producing comercial quantities of gas the landowner can use the production for himself but becomes resposible for closing the well if it stops completely.

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mjbrown

11-11-2005 16:21:10




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 Re: OT: gas leases in reply to Paul Allen, 11-11-2005 15:01:56  
We signed one last year. They were all exited about the results of seismic survey they had done. They drilled two wells a few miles away down to about 8000 ft. and found gas but not the huge amounts they were hopeing for. They left and haven't returned.
Here in NY they leases and environmental stuff is tightly regulated by the DEC and the AG has jumped on them when he didn't like the lanquage in a few leases. It depends on your state how protected you are.Our lease expires in ten years.

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