A Question on Mineral Rights

[bombay_43]

I have an aquaintance who recently purchased the gas and mineral rights from his grandfather. They no longer own the land, but have been approached to sell gas.

Any idea where this fellow can obtain an idea of what price to negotiate for, what legal aid he would need, if he is liable for any happenings, etc.?

Where does he start? Farmers Advocate?
Appreciate any input.

[rsomer]

I would recommend contacting Paul Vasseur who may be reached at:

Paul Vasseur -
P.O. Box 757,
Three Hills, Alberta, T0M 2A0
Phone: (403) 443-7392
Fax: (403) 443-7926
E-mail: vasseurp@telusplanet.net

For more info see:
http://www.eub.gov.ab.ca/BBS/public/ADR/mediator_Vasseur.htm
http://www.certus-strategies.com/case_management/mediators/oil%20and%20gas/vasseur.htm

[cowman]

A quick tutorial...
The company is trying to lease the mineral rights. Oil Companys typically try to lease large blocks of adjacent land owners so as to control the pool of gas or oil they think is under the land. They usually offer a very low price per acre ($20-50), want 3-5 years lease for that amount and offer a 15% royalty.It is not in your friends interest to take that kind of a deal. You need to be able to play the game and if they are hot to trot it can be a pretty decent deal. The last one I did was for 0ne year, $145/acre, and 18% royalty with no production delay(a production delay is 6 months production where you get no royalties) but they were chomping at the bit to drill that one...and I used a lawyer to get it done.
Your friend needs to try to figure out if they intend to drill or are just fishing around. A lot of times the company trying to buy up cheap mineral leases is not the company who wants the gas/oil.
If it looks hot and heavy a lawyer who specializes in oil and gas is well worth what it will cost you in fees. Remember oil companies are devious and their landmen will tell you the most outrageous lies. These are sharp cookies and sleazy dealings are their stock in trade!

[rodb]

In the Alberta Express (www.agcanada.com), there was an article on the Freeholder lease. They have a website at www.fhoa.ca

Hope this helps.

[bombay_43]

Thank you all for the info, I have passed it on to the fellow who needs it.

I find it interesting how we all have different areas to start at.

Thanks again! This was a totally new area to me.