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About David B. McCall
Expertise
Questions regarding oil and gas exploration and production, the operation and management of oil and gas producing properties, and questions related to mineral ownership, title problems, and oil and gas leases.
Experience
I am Board Certified in Oil, Gas and Mineral Law in the state of Texas. I have more than 32 years of experience in the industry as both an in house attorney for major oil companies and as a partner in oil and gas firms. I am also a mineral owner and receive royalties from oil and gas production. I have extensive title examination experience, and have represented clients in many administrative and court proceedings.
Organizations
State Bar of Texas, Texas Bar Foundation, and Austin Bar Foundation.
Publications
Various state bar seminars on Oil and Gas matters.
Education/Credentials
I have a business degree in marketing from McMurry University, 1971, and a JD degree from Texas Tech University in 1974, where I graduated 17th in my class. Board Certified in Oil, Gas and Mineral Law in 1986.
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You are here: Experts > Industry > Energy & Environmental Resources > Energy Industry (Oil & Gas) > Coal Bed Methan Option - Is it worth it?
Expert: David B. McCall
Date: 5/10/2008
Subject: Coal Bed Methan Option - Is it worth it?
Question
Hello - I live in South West part of Pennsylvania and have land in PA and WV. I was recently contacted by Argos Exploration who wanted me to participate in a Coal Bed Methane Option program. They claim they will negioate on my behalf so that I can get a better price for my CBM. They state they will combine my 1200 acres with the 300,000 or so they already have on a 24 month contract and then sell the options to another company for more than I would have gotten by leasing with another company directly?
How does this work? How many acres do they need to command a better price than $10.00 per acre? Is CBM as good of a money maker as O&G? Can I expect to see the offering from companies like CDX go from $5.00 to $150.00 per acre like it did with normal oil and gas?
Also - Argos explains what they do better than I can on their website at www.argosexploration.com
Answer
Hello Paul. I don't know the answers to your questions, but I did want to pass along comments I have seen about Arogs Exploration:
"would also like to make a statement about Argos Exploration. I had previously been offered a lease for my coal bed methane (in West Virginia) by another company. When I asked that company why they were only paying 6.25% royalty, they either could not, or would not answer that question to my satisfaction. So, I started Google-ing "coal seam gas lease" and Argos Exploration's web site showed up.
I called their toll free number and posed my question to them. Not only was their staff very knowledgeable they were more than happy to help answer my question - they explained it as such: Because West Virginia has not made a legal decision on who actually owns the coal seam gas, or coal bed methane, then if I only owned my oil & gas rights, or if I only owned my coal - then I would get 6.25% royalty from the production of the coal seam gas - if I owned both the coal and the oil/gas rights, then I would receive the full 1/8th royalty. Which made sense to me.
Argos Exploration's staff also sent me an excerpt from their CBM lease detailing how they manage the split ownership on their lease...
"...However, ownership of coal seam gas (at the time of this LEASE) has not been conclusively determined in West Virginia. If coal seam gas under the premises, or any part thereof, or any interest in such coal seam gas or in the royalties payable hereunder with respect thereto, is claimed by others, LESSEE shall have the right to deposit, in escrow, such royalties in the registry of a
court of competent jurisdiction until final determination of such claim; provided, however that LESSOR shall have the right, in case of any
such adverse claim and the withholding of such royalties, to payment of same to it upon furnishing a bond or other security to LESSEE as
indemnity against such claims until finally determined in LESSOR’s favor."
Finally we have a company that seems to go the extra mile for the landowner and isn't just worried about their bottom line! "
I hope this helps, and good luck!
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