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Tractor Talk Discussion Forum

OT- Gas Oil Leases

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Bill (IN)

08-03-2006 11:18:45




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I know this is a bit off topic, but I have been hit up quite a bit in the past year or two about signing my land up for an oil and gas lease. I have about 100 acres, and have been offered anything from $3/acre to $15/acre for either 5 or 10 year leases. Anyone have any experience with these? What should I be aware of? and what is a good going rate? Someone told me that I should ask for $25/acre. I am located in southern Indiana.

Thanks,
Bill

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led

08-03-2006 19:49:44




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 Re: OT- Gas Oil Leases in reply to Bill (IN), 08-03-2006 11:18:45  
Were you approached by an producer or by a third party? Are there any producing wells near you?
Youre in the Illinois Basin even though you are in In.
Standard is 1/8 owner royality (for oil) but it can differ depending on locataion.
Third party gets a piece of pie!!
State probality has registery of wells drilled.
Get a lawyer.
HTH



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Bill (IN)

08-04-2006 09:19:37




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 Re: OT- Gas Oil Leases in reply to led, 08-03-2006 19:49:44  
Thanks for the information. After thinking about what you guys say, you are correct, 1000 or 2000 or even 20,000 is not worth it. I was just thinking of making a few bucks, cause more than likely they wouldn't be drilling. But the land that I am talking about has been in my family many generations(actually been in my family since it was settled), and there is no price that I would put on the land, so why would I give someone rights to do "as they please"

Thanks,

Bill

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Eric in IL

08-03-2006 15:07:59




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 Re: OT- Gas Oil Leases in reply to Bill (IN), 08-03-2006 11:18:45  
I agree with Alan, run them off !! How far is $1000.00 bucks going to go repairing the damage and inconvenience you WILL suffer if they decide to drill. Watch out what you sign your name to !



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Allan In NE

08-03-2006 14:48:35




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 Re: OT- Gas Oil Leases in reply to Bill (IN), 08-03-2006 11:18:45  
Bill,

Treat those guys just like ya do door to door salesmen. Run 'em off.

Allan



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Midwest redneck

08-03-2006 13:43:06




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 Re: OT- Gas Oil Leases in reply to Bill (IN), 08-03-2006 11:18:45  
What ever you do with the Greedy oil/gas company make sure a lawyer reads it over and dont sign anything that is ambiguous. Dont let them take advantage of you, remember its your oil/gas.



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Sand Flat Bob

08-03-2006 13:38:53




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 Re: OT- Gas Oil Leases in reply to Bill (IN), 08-03-2006 11:18:45  
Don't know about your states laws, but having plenty of experience here in Texas. Never sign a lease of over 3 years and make sure it doesn't have a automatic renewal clause. Once they have your name on a lease, they totally control your land. They can do anything they want and the only recourse on the surface rights is to argue about how much damage. The Natural gas drilling here is ruining the country. Pumping all the fresh water from the underground supplies including your own lakes etc. and poluting the surface waters. Several towns and water districts are already having their wells go dry. They farm out the hazardous materials, that is to spread it thin over all your land to get it low enough to meet EPA requirements. Go to the National Royality Owners web site and you will learn a lot. Never sign any lease without having a Lawyer who specializes in Oil and Gas leases go over it first. Just what I have learned by hard experience in the past 40 years.

Bob

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Janicholson

08-03-2006 13:13:12




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 Re: OT- Gas Oil Leases in reply to Bill (IN), 08-03-2006 11:18:45  
I'm no lawyer, but I believe in return on the efforts I make. A profit share agreement with a % of production would be more valuable to you. If they produce 1,000,000 barrels at 1% would be about $700,000 at 70 per barrel. Theymight not agree, but who's oil is it! JimN



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edchainsaw

08-03-2006 14:29:10




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 Re: OT- Gas Oil Leases in reply to Janicholson, 08-03-2006 13:13:12  
the % of production deal would be great... HOWEVER--- I know of a lot of the ones around that use to have that... never seemed to get any oil from there wells... funny thing was the truck stopped at the tanks and pumped stuff on but supposedly nothing came out of the well...


we signed up a lease for I think $8 but it got where a month later they were giving $30



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