What’s Happening?
MLMOA Annual Meeting
Sat Nov 22
Havre’s Duck Inn
Monte Mason - Guest Speaker
report of the year’s activity
election of 3 directors
fellowship and discussion
December Meeting TBA
Regular scheduled meeting falls on Christmas
COMMENTS FROM THE PRESIDENT
Hurray! The
election is over and no more campaign speeches and promises. Now the elected candidates can start working
on fulfilling all those promises that they made.
January brings another Legislative session with many
new and old issues that will affect all of us.
MLMOA will be keeping a watch on these activities again.
Your
MLMOA has been busy this fall. On
September
4th, four directors traveled to Big Timber to put on a town hall meeting. This meeting was on leases and easements and
85 concerned residents attended. Mineral
owners are being asked to sign leases for oil and gas in the Big Timber
area. They are being offered $100/acre
and 1/6 royalty (16.67%) on a paid up lease for a 5 year term. This equates to $20/acre per year! Some of the wordings in these leases are not
for the royalty owner’s benefit.
The
companies are asking mineral owners to sign confidentiality agreements along
with a memorandum of lease. Companies
ask for a memorandum of lease so they only have to file the memorandum in the
court house, and not the lease. These
companies do not want others to know what the terms of the lease are and the
payments that have been offered to others.
They are not offering free gas or including a pugh clause, which is not
good for the mineral owner. Along with
these items, the lessor is being asked to share in the past production costs
and sign away ALL minerals. These
are a few of the reasons that the royalty owner needs to read and understand
what is in the lease.
On
On
September 18-20, Ralph Montgomery and I were among over 400 royalty owners that
attended the 2008 National NARO Convention in
Wind
power leases have appeared again in the South Chinook Area. Several members in the area have been asked
to lease their land for wind towers.
Know what you are signing before you do! They have formed a group to
gather all the information and how to best deal with this issue.
Iofina
and the iodine issue has become a topic of interest again. Iofina has started to build a large building,
laying pipelines, and drilling wells north of Gildford. It appears that the leases that were signed
give the company the right to proceed.
There
have been reports of excess surface damage, no well site or pipeline permits,
and some companies are reluctant to pay fair damage compensation.
President Herb Vasseur
MEMBERSHIP DUES
Please send in your 2009
dues
$30 Check or Money Order
to:
MLMOA MEMBERSHIP
LANGUAGE IN LEASES
Over the past few months
several leases have been presented to the directors for review. Some of the new terminology that has appeared
includes:
A.
“This lease is for oil and gas, AND
ALL MINERALS”
Remove any reference to all
minerals.
B.
“NET value at well head”
Change to be GROSS
value free and clear.
C.
“AFTER DEDUCTING any gas used on
premises and any reasonable and necessary cost of transportation, compression,
dehydration, gathering, processing, conditioning, etc.”
Remove any language that
refers to the lessor sharing the cost of transportation, compression,
dehydration, gathering, processing, conditioning, etc.
D.
Most leases offered refer to shut
in wells and tender to pay a shut in fee of one dollar/net mineral acre.
This shut in fee should be
equal or exceed the original lease fee.
The State of Montana lease form uses language, I.E. “The shut in payment
must be at a rate of $400/per lease each year or the amount of the annual
rental provided in the lease, whichever is greater. This is payable before the annual anniversary
date of the lease.” If you lease for
$10/acre for a 5 year lease then your shut in should be AT LEAST $2 per
year/per acre.
These examples are some of
the reasons that we need to read every lease, easement, contract over several
times to fully understand all of the terms that we are asked to agree upon and
sign. Remember that the prices mentioned in the MLMOA Red Book are base or
minimum prices, not the maximum that you should be paid. Start with these base prices and negotiate
up.
Gasoline Prices
(Average price in dollars –
Today 2.23 2.38
Last Week 2.43 2.59
Last Year 3.10 3.30
US
Today 2.23 2.40
Last Week 2.40 2.58 Last Year 3.10 3.31
What has been going on?
ü Lease offered in the Kremlin
area for $19/acre for a 5 year term.
ü Proposed wind farm south of
Chinook.
ü Klabzuba is in the process
of having new owners.
ü Iofina has been featured on
CNBC.com.
ü Some companies are going to
a 3 year lease with an escalation clause for an additional 2 years, instead of
a straight 5 year lease.
ü People are receiving annual
well site payments in Hill and
ü Land prices are increasing
so we need to keep that in mind when damages are paid.
The
MLMOA 2008 Board of Directors
Pres Herb Vasseur Chinook
357-3563
V Pres. Jim Warburton Chinook 357-2958
Sec/Tres Ralph
Dir Clarence Keller Havre
394-2325
Dir Dale Williams Chinook
357-3419
Dir Kevin Elias
Chinook
357-3638
Dir Ted Solomon Havre 395-4415
Dir Jim Heavey Havre 398-5542
Dir Dennis Lawlor Havre
395-4454
Clerical Sec Cathy Gregoire Havre 265-3495