March 2014 Landowner Oil and Gas Newsletter available
The current newsletter features mineral right offers, oil and gas development in Michigan and increasing interest in Michigan's mineral deposits.
Information in the March Issue:
- Michigan Oil and Gas Development: 2013 in Review
- Southeast Michigan Continues to Draw Mineral Interest
- Survey of Oil and Gas Attorneys Indicates Significant Savings from Post Production Costs Lease Negotiations
- Offers to Sell Mineral Rights Should be Considered Carefully
“Michigan Oil and Gas Development: 2013 in Review” - Relatively low natural gas and oil prices continued to slow oil and gas exploration in Michigan, according to the Michigan Oil and Gas News. The publication projects that final totals will show seven percent fewer wells drilled in 2013 from the previous year. Activity in the state is still much below the most recent peak in 2008.
“Survey of Oil and Gas Attorneys Indicates Significant Savings from Post Production Costs Lease Negotiations” - Most oil and gas leases contain clauses that allow the Lessee (oil and gas production company) to calculate and deduct what are known as post production costs from the mineral owner’s royalty. A 2013 survey of oil and gas attorneys that represent private mineral owners found that potential post production costs deductions were often reduced substantially by negotiation of the lease terms. The article presents the results of the survey.
“Sales of Non-producing Mineral Rights” - Southeast Michigan, including Sanilac, Lapeer and Monroe counties are experiencing interest from potential buyers to purchase mineral rights. The article discusses many things a seller should consider both short term and long term when evaluating the sale of non-producing mineral rights. This is a permanent sale and has potential future impacts that the surface land owner will need to be willing to accept. Be sure to seek good professional advice before selling your mineral rights.