Sunday, October 19, 2008

Haynesville Shale: Leasing & Mineral Rights Problems

There is no doubt that the sudden drop in natural gas prices has had a huge impact on the Haynesville Shale formation in East Texas and Louisiana. If any of these Shale plays in the USA and Canada can overcome this type of drop it would be the Haynesville Shale and Barnett Shale.

With many companies such as Chesapeake Energy ( CHK ) and Petrohawk Energy ( HK ) cutting back on drilling and their budget, mineral rights leasing will fall as well. In fact, Landowners are nervous about what I described above. Some even fearing they won't get paid. This is why it is so important when signing a mineral rights lease that you take it seriously and hire a great lawyer to represent you.

Here is a great article about what is happening right now with regards to the land leasing from Chesapeake Energy.

"The key is in the wording, Fitzgerald said. What she's witnessed in the past few days is Chesapeake not honoring an "agreement to lease" prepared by the company's own legal counsel. The document, which landowners she represented opted for instead of a letter of intent, states it is a binding and enforceable agreement but it is still not the actual lease."