hi Cdnbkkn, In that case, welcome to the group. We enjoy having all tradespeople help all of us along the way. Yes it is true that Top Leasing is generally approached in the last year or so, but with the recent activity I believe there is a resurging interest in doing so earlier. With the drastic shortage of rigs, personnel, pipe, transportation options, it is getting tougher and tougher to get to the oil in a 4-5 year timeframe. Hence, more top leasing by those willing to take that risk in areas. The 'Double Leasing' play hardly sounds plausible, given the Site Draft mechanisms employed by landmen and companies. Wouldn't the 'losing company' simply negate or stop-payment on Site Draft #xxx? And we do welcome your skill and knowledge, and if you are being an ass, I will let you know! (Let us get to know you first, THEN you can be an ass.....lol) Best Regards, Rufus
On Oct 15, 4:18 pm, cdnbkkn <[EMAIL PROTECTED]> wrote: > Top leasing generally occurs near the end of a lease term. It could > happen at anytime throughout the lease, however like Rufus said, > Company #2 usually puts a deposit on their toplease (~50%). If they > place a top lease too early it there is an increased chance that the > original leasing company will have time to drill a well, thereby > forcing company #2 to forfiet their top lease money. Topleasing > commonly occurs within the last year of the lease agreement. If a > company has offset acreage they will usually look around at > surrounding leases and monitor them for expiries. It is a good deal > for the mineral owner because it assures them that their acreage will > be leased. This is not the double leasing I was refering to earlier. > > On Oct 15, 2:29 pm, rookie <[EMAIL PROTECTED]> wrote: > > > > > you go rufus;; teach me about this TOP LEASING -- leasing everyone... > > > On Oct 15, 2:44 pm, Duane <[EMAIL PROTECTED]> wrote: > > > > Take a good look in the mirror and then say good-by, we have been > > > doing just fine without you or be more civil yourself and enjoy our > > > blog. > > > > On Oct 15, 1:13 pm, cdnbkkn <[EMAIL PROTECTED]> wrote: > > > > > I'm not talking about a top lease. If that was what I had meant that > > > > is what I would have said. I am talking about mineral owners making a > > > > deal with one company to lease to them and then the next day making a > > > > deal with another company for the same rights for the same lease term. > > > > Which ever company files first gets the lease, but often it takes so > > > > long to file a lease that in the meantime the mineral owner gets paid > > > > twice for the same lease term. This IS illegal. > > > > Also, I am unaware of the company that would openly OFFER a 25% > > > > royalty. > > > > > You seem very hostile and have a very attacking attitude. I don't > > > > remember trying to shame mineral owners or crying in my soup. If this > > > > is your idea of a disscussion group, you can have it. > > > > > On Oct 15, 12:58 pm, "Rufus O'Malley" <[EMAIL PROTECTED]> wrote: > > > > > > Double leasing is NOT illegal in North Dakota or any other US state to > > > > > my limited knowledge - I do not know about Canada's laws on that. It > > > > > is called TOP LEASING in the US. Company 'B' can offer a Top Lease to > > > > > Mineral Owner that pays the MO $x bonus dollars per mineral acre, > > > > > term, and royalty rates, and offer , let's say half of the money up > > > > > front, and the remainder ONLY if the Top Lease kicks in upon the > > > > > expiration of the bottom lease's primary term. Yes, the oil company > > > > > or leasing agent are gambling that Bottom Lease Holder will not drill > > > > > in the primary term, that it will expire, and his Top Lease will > > > > > become the lease holder. Nobody forces them to offer top leasing. Top > > > > > leasing can also get bottom lease holders of their collective fannies > > > > > and get them to actually drill the lease instead of sitting on it. I > > > > > would take a top lease in a heartbeat and not feel one whit guilty or > > > > > shameful. Since I personally was not negotiating our last lease, nor > > > > > did I have the knowledge that I have now, I have a lukewarm deal. > > > > > Ignorance on the part of the Mineral Owner is BLISS only for the oil > > > > > companies that take advantage of it. And, buddy, they have, and do, > > > > > and will. So don't boo-hoo to me about the poor oil drilling > > > > > companies. No Sale. > > > > > And it NOT greedy on the part of the mineral owner to ACCEPT such an > > > > > offer. Nor is it 'outrageous' if the drilling company is willing to > > > > > accept or offer 25% to the mineral owner, or the mineral owner has > > > > > such excellent negotiating skills to manuever such a rate. Kudos to > > > > > the ones who have the cajones (ka-hone-ayes - you get the drift) to > > > > > stick through the negotiating process to get that deal. I would buy > > > > > THEM coffee! > > > > > This is not a business for the faint of heart or the timid or jaded. > > > > > This business takes guts and fortitude on all sides.... Survival of > > > > > the fittest. > > > > > The oil companies get plenty --- I have no pity in my heart for that, > > > > > however, I have respect for their efforts, but without the mineral > > > > > owner, what do they have, nothing to drill, that's what. > > > > > It is in the best interest of all parties to 'get along' with respect, > > > > > integrity, and forthright communication. I very much enjoy the > > > > > discussions I have had with the exec in the company planning to drill > > > > > my interest. I spoke with them recently, and had questions answered > > > > > and asked what I can do to help them... so I got a lukewarm rate, not > > > > > the bottom, not the best available, but that was only because of my > > > > > family's ignorance... not because of the oil company. They had an > > > > > excellent negotiator in their landman. We did not know what the > > > > > market would bear.... I won't let it effect my relationship with the > > > > > company because that would not be smart. There was nothing personal > > > > > about the negotiation. Each side tries to get the best deal. It's > > > > > Business. Stop trying to 'shame' mineral owners by what kind of deal > > > > > they can negotiate. .... > > > > > Rufus > > > > > > On Oct 15, 12:47 pm, cdnbkkn <[EMAIL PROTECTED]> wrote: > > > > > > > I said 25%+ royalties are outrageous. 12 to 19 are norm. No argument > > > > > > from me. Lease rates per acre are what ever people are willing to > > > > > > pay. > > > > > > Again no argument. It is double leasing (which is illegal) and > > > > > > demanding so much off the top (royalties in excess of 25%+) that > > > > > > will > > > > > > create wells that may soon be uneconomic. > > > > > > This is the greed I talk about. > > > > > > > On Oct 15, 11:16 am, "Rufus O'Malley" <[EMAIL PROTECTED]> wrote: > > > > > > > > Wow. I think I need to get in on this discussion, I don't have the > > > > > > > time right now, but I will make the time. > > > > > > > And, no and Hell No, that is not greed. You seem to forget that > > > > > > > even > > > > > > > at a 25%, (which, btw, is very rare) that still leaves 75% for the > > > > > > > drilling company. > > > > > > > They have been squeezing cheap leases out of mineral owners for > > > > > > > decades in the Williston Basin of ND. Now it's time to pay the > > > > > > > piper. > > > > > > > Mineral ownera are not greedy, they are excited by the prospect of > > > > > > > something never anticipated.... and they still have the respect > > > > > > > for > > > > > > > who came first, the oil companies or their ancestors...but they > > > > > > > are > > > > > > > not stupid people... this time they have the power to stand up for > > > > > > > what is their birthrite...and they are learning just how to do it. > > > > > > > And, Excuse me, who is OFFERING to GIVE a top lease???? The oil > > > > > > > companies and/OR the landmen who are independantly speculating, > > > > > > > that's > > > > > > > who! Good luck to any mineral owner who goes 'shopping' for > > > > > > > someone > > > > > > > to lease their acreage! HA! It just doesn't work that way! I > > > > > > > know, I > > > > > > > tried it in the 8 years out of 55 years that we were not leased! > > > > > > > Not > > > > > > > even a nibble. Oh, sure, I got the 'give me a 6 month free option > > > > > > > contract and I will see what I can do for you." The action out > > > > > > > there > > > > > > > is NOT instigated by the mineral owner. Never has, never will be. > > > > > > > And, tell me exactly WHY you think that the laws of supply and > > > > > > > demand > > > > > > > should not apply just as equally to them as it does to industry? > > > > > > > If the drillers are so abused by the mineral owners taking a fair > > > > > > > share of the pie, (that's IF you call between 12.5% to 18.75% > > > > > > > which > > > > > > > are the NORM royalties) they need to find a different industry. > > > > > > > Sounds to me like an independant driller having a snit about savvy > > > > > > > mineral owners standing up to him about their lands and their > > > > > > > minerals. They are rewarded for their R&D, planning and > > > > > > > initiative > > > > > > > with their 75%-83.3%-88%!!!!!!!!!!!! > > > > > > > And nobody who has lived in the 'Bakken' areas forgets that the > > > > > > > bust > > > > > > > comes just as fast, if not faster, than the boom. I've lived it, > > > > > > > as > > > > > > > most on this board have lived it ... so I don't think your jaded > > > > > > > impressions of the nasty old mineral owner will buy you much here > > > > > > > -- > > > > > > > better have your own coffee money. > > > > > > > So, sorry Charlie, wrong tuna. > > > > > > > Rufus O'Malley > > > > > > > > On Oct 15, 11:47 am, cdnbkkn <[EMAIL PROTECTED]> wrote: > > > > > > > > > Yes I do feel that many (perhaps not all) mineral owners are > > > > > > > > becoming > > > > > > > > greedy. I know of several instances where mineral owners have > > > > > > > > double > > > > > > > > leased their acreage to more than one company or have insisted > > > > > > > > on > > > > > > > > royalties that are outrageous (25%+). Is this not greed? > > > > > > > > Life is tough, many people 'bust their asses' to get by in ND > > > > > > > > and > > > > > > > > elsewhere. Unless you are the one paying for the drilling you > > > > > > > > should > > > > > > > > not count on your fortune coming from 10,000 feet underground. > > > > > > > > I do feel that mineral owners should be compensated for their > > > > > > > > rights. > > > > > > > > I want to make that clear. However, the risk is entirely on the > > > > > > > > oil > > > > > > > > companies and they should also be rewarded for their development > > > > > > > > strategies, planning, and initiative. Once a play becomes > > > > > > > > successful > > > > > > > > it is surprising how fast drilling costs increase because > > > > > > > > everyone > > > > > > > > wants to make their quick dollar. > > > > > > > > > On Oct 15, 9:19 am, Desertdirtrider <[EMAIL PROTECTED]> wrote: > > > > > > > > > > cdnbkkn Im guessing this stands for Canadian Bakken ..? Do > > > > > > > > > you > > > > > > > > > really think you should include Mineral Owners in your > > > > > > > > > sneering of- Hide quoted text - > > - Show quoted text -... > > read more » --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "Bakken Shale Discussion" group. To post to this group, send email to [email protected] To unsubscribe from this group, send email to [EMAIL PROTECTED] For more options, visit this group at http://groups.google.com/group/bakken-shale-discussion?hl=en -~----------~----~----~----~------~----~------~--~---
