AboutJames H. McConnell, CPL Expertise READ CAREFULLY BEFORE ASKING ME A QUESTION
I will try to answer questions about oil & gas leases, minerals, royalties, and servitudes, if the questioner has provided a good description of the lands. I require a section, township and range for any land not it Texas. I require a survey name and an abstract number if the lands are in Texas. I will answer questions about offers to lease or purchase mineral interests only if all terms of the offer are in the question, including the term, the royalty and the amount offered. Failure to provide this information will result in the question being rejected.
I have answered more than 2300 questions on this site and get as many as fifty in one day. I do not have the time nor am I inclined to deal with detailed questions requiring an attorney. I am not a substitute for an attorney. If you do not write in a cognizant form, I will reject your question. If you have done real research and have a question I find interesting, I will answer it. If you haven't done any research on your own, I will not do it for you.
If you do not rate the first answer, do not send a follow up, because I will reject it. If my time means so little to you that you feel that you cannot take your time to rate an answer, I do not have time to answer another question.
Experience I have been a Professional Landman for more than thirty five years. I have drilled and operated oil & gas wells in Louisiana and Texas and an familiar with the rules and Regulations of the Texas Railroad Commission and the Louisiana Department of Conservation. I have testified in court as an expert witness.
Question In La. is there a requirement that a gas company must have a certain amount of land in a section under lease in order to drill? It is my understanding that a well on any part of a section pays royalties to all owners in that section, and that the drillers do not have to get all the land under lease to drill. Why compels them to lease and pay bonus dollars for ANY of the land other than needed for the bore? I always see comments about power in numbers, but why do they even bother leasing more than needed to drill down? Your help is greatly appreciated.
Answer Oil & gas companies do not have to get all of the leases in a unit. In fact a company could get a lease on one tract in a Conservation Department designated unit and permit a well to a depth sufficient to test the unitized horizon and send every one else in the unit an AFE or a bill for their share of the costs of drilling the well. The unleased minerals owners would have to put up their money before the operator began drilling the well or be penalized by 100% or 200% of the total costs of drilling, testing, completing and operating the well. But this doesn't make much sense for the operator, as they expect more than 200% return on their investment. That's why they try to get every owner in the unit leased. It gets the landowners out of the working interest business and into the royalty business where they get up front money for leasing do not get bills when a well is drilled.
There are unleased mineral owners that owe for five or six wells in a unit and will never see a dime from them as they will never technically reach a point of paying out the interests share of costs plus the penalites. If the owner doesn't like it, they can sue the operator and maybe one day far in the future, if the attorneys don't break you, first, you will get some royalty.
Oil companies will do almost anything to get the last leases in a unit. If this is your case, then get the most you can and sign the lease.
