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Hi everyone. Recently my dad passed away and my brother and I inherited some farmland, and he had just began a lease to allow a company to search/drill for oil. It's been about a year and half since that started and we haven't heard anything back yet.
My question is how long does the entire process of discovery/drilling take to see if anything is of value? Years?
A contract to search may or may not be used by the company, may or may not find anything of value. I'd contact the company and ask them what's up. Drive by the property if you can and make sure they're not drilling for oil without letting you know and not cutting you in on the profits.
Hi everyone. Recently my dad passed away and my brother and I inherited some farmland, and he had just began a lease to allow a company to search/drill for oil. It's been about a year and half since that started and we haven't heard anything back yet.
My question is how long does the entire process of discovery/drilling take to see if anything is of value? Years?
You may get more responses posting this in the House thread.
It takes about 90 days for the results to come back. I'm assuming they did soundings with a thumper truck. If you make friends with the crews, they can tell you the same day. Most of the guys can read the PC readouts. Just because they have it under lease doesn't mean they are going to drill. Gulf Oil had my 1300 acre ranch in the Texas hill country under lease for 40 years and never drilled. I sold that ranch and have another in South Texas with oil rights and lease. They sounded the ranch down south 2 years ago and haven't talked drilling at all. Works for me. I get a check every year and don't have a billion and one morons driving thru the place. Yeah, I could make more $$$$$$ if they drilled....maybe, but for what? Having oil wells is not all that great if you like anything resembling privacy.
Hi everyone. Recently my dad passed away and my brother and I inherited some farmland, and he had just began a lease to allow a company to search/drill for oil. It's been about a year and half since that started and we haven't heard anything back yet.
My question is how long does the entire process of discovery/drilling take to see if anything is of value? Years?
Was your dad receiving regular option checks?
As mentioned, you might want to take a drive by to see if there's any activity.
My family ran into this 30 or so years ago with coal. Local coal broker phonied up mineral rights transfer and a company came in and started stripping. Took about a year to straighten it out and get the royalty checks coming in.
They buy up huge amounts drilling rights and never drill.
My wife's family receives a very small check every year because they sold drilling rights on a plot many years ago. So far as I know there has been no drilling for over thirty years but the checks (less than a $1000 a year) continue.
Is there anyone on here who can give some general advice about land leases for Marcellus shale gas drilling? We were recently approached by a company that has a platform location already identified. We intend to hire a gas attorney, but I'm still interested in learning as much as I can about what I should try to include, exclude from the contract.
I'm specifically confused about the royalty. If it's 20% based on gross is that a straight 20% or is it a percentage of 20% divided among other properties in the parcel? If it is a percentage of a percentage, is the percentage based on how many acres owned in the parcel?
cdelena mentions an annual payment even when drilling doesn't happen. How is that possible?
Everyone in this thread mention being locked into contracts for decades without any drilling. Is it possible to restrict the length of the contract----have to drill within X years or the contract expires---to protect rights and allow an opportunity for another company to drill?
It depends not only on if they drill but what you own as rights. some are just land use and the oil is not owned. Normally the contract spells out the terms.If they have or are drilling close by they may never drill there depending.
Is there anyone on here who can give some general advice about land leases for Marcellus shale gas drilling? We were recently approached by a company that has a platform location already identified. We intend to hire a gas attorney, but I'm still interested in learning as much as I can about what I should try to include, exclude from the contract.
I'm specifically confused about the royalty. If it's 20% based on gross is that a straight 20% or is it a percentage of 20% divided among other properties in the parcel? If it is a percentage of a percentage, is the percentage based on how many acres owned in the parcel?
cdelena mentions an annual payment even when drilling doesn't happen. How is that possible?
Everyone in this thread mention being locked into contracts for decades without any drilling. Is it possible to restrict the length of the contract----have to drill within X years or the contract expires---to protect rights and allow an opportunity for another company to drill?
Any information would be greatly appreciated.
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The payment is basically an option reserving the right to drill at some future time. You can try to include a sunset time but why? That's a guaranteed payment every year for just owning the property and reserving that company's right to drill. If they never drill they never drill, that money will have been in your pocket.
I'm not familiar enough with gas royalties to offer you an answer. When my one uncle had an oil well on his farm in Forest County he got a royalty payment for every barrel extracted. This was from the 40's through the 70's when the well was finally capped.
The gas leases I'm familiar with dated from the 20's. At that time many land owners traded a royalty payment for free gas from the well.
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