What is the Haynesville Shale in Louisiana? The Haynesville Shale is a geologic formation of sedimentary rocks containing natural gas.
What are mineral rights? Mineral rights are the rights to sub-surface minerals such as oil, gas, coal and metal ores under the land, while surface rights are the rights for land for agriculture, residential housing, commercial, and other purposes. In Louisiana and many other states such as Texas, mineral rights can be leased and sold separately from the surface rights.
What are royalties? Royalties are the mineral owner's proportionate share of production as reserved in an oil and gas lease.
Why sell your minerals? Cash from the sale of your minerals is a sure thing. Leasing your minerals is a gamble. Will they drill in your area? Will the well produce? If it does produce, how much and for how long? When you sell your minerals, you receive the full agreed upon sales price, regardless of if a well is drilled or if it produces.
What is a Division Order?
A Division Order is a document that the well Operator issues. It describes the property, the Operator, the legal description, the Owner's remittance address and tax ID information, if known, as well as the Owners's decimal interest in the property. The Owner is asked to sign and return the Division Order. This information is used by the Operator to remit proceeds to the Owner.
How do I know if I own mineral rights on my property?
If you own the land, it doesn't mean you automatically own the mineral rights under the land. Most landowners in Louisiana own the mineral rights to their property, but the best way to be sure you own the mineral rights is to have a land professional or attorney conduct a title examination.
How much can I expect to receive for my minerals? All mineral interests are just as unique as the surface itself. The value of a mineral interest is derived from various factors such as location, leasing activity in the area, and well and production activity in proximity to the mineral interest. And, market conditions within the oil and gas sector are also considered when determining a price paid per acre. Mineral sale offers made by Ilios are always in line with the fair market value of the minerals at the specific time of sale.
Will I receive a draft as payment for the sale of my minerals, or a check? And when will I be paid? Ilios renders payment on the sale of minerals with a certified check. Drafts often take too long for processing and other bank regulations, resulting in a delay of funds to the payee. Ilios issues a check as payment, and the check is delivered on the date of closing. If a seller desires, the funds can also be wired into the seller's bank account.
If I have already leased my minerals, can I still sell them? Yes, you can. You still own the minerals, and as such, they are yours to sell. The lease was simply a "rent" agreement, giving the Lessee the right to explore for oil and gas.
What is the 10 year prescription rule? How does this work? In Louisiana, there is a prescriptive period of 10 years, and this means that the minerals revert (prescribe) back to the current surface owner under certain conditions. Starting from the effective date of sale and going forward for 10 years, if there has been no well drilled, or if production has ceased for 10 years, then the mineral buyer loses the minerals and the mineral interest is returned to the current surface owner at the end of Year 10. But if a well is drilled and is producing within this 10 year period, then the minerals remain with the buyer for the life of the production until the production has ceased for a 10-year period.
What is the difference between a royalty owner and an interest owner? A royalty owner shares in production revenues free of costs, while a working-interest owner bears the costs of development and operations.
Why does my monthly payment sometimes vary? Many factors contribute to your payment, including: market conditions, fluctuating commodity prices, regulatory or contractural changes, production volumes, seasonal conditions and well downtime.
How is the route for a proposed pipeline determined? Construction, environmental and landowner considerations are the forefront of the routing process. Where possible, the route is selected to avoid public impacts while minimizing environmental issues, such as the number and location of water body crossings, scenic waterways, byways, wilderness, national parks, and monuments. Where possible, the proposed route will run parallel to existing pipeline and power line corridors and/or property lines and boundaries.
Will a pipeline on my land affect property values? And, will it affect my insurance rates? Property values are generally based on the actual use of the land. Construction of a proposed pipeline will not change the general use of the land, although certain building structures and landscaping cannot be built on the right-of-way. According to a 2001 study funded by the Interstate Natural Gas Association of America (INGAA), the presence of a natural gas pipeline had no significant impact on the sale price or demand for properties located along a pipeline right- of-way. And, to our knowledge, a natural gas pipeline would have no impact on landowner insurance premiums.
What is an easement and how will I be compensated? An easement is the same as a right-of-way, which allows the pipeline company the right to use the land to install the pipeline, but an easement does not transfer title of the land to the company. The landowner continues to maintain ownership of the property, although certain land-use restrictions are associated with a right-of-way. All landowners are compensated for an easement, and the pipeline company will work with landowners to determine fair market value for the easement.
What about damage to trees, crops, fencing, etc.? There is (should be) a clause in the language of the Agreement/Grant specifically addressing the damage to, compensation for and restoration of such things. If the language is not specific enough to satisfy the landowner, he/she can and should make the concern(s) known to the negotiator. Damages for surface use and pipeline right-of-way are also considered non-taxable items. Make certain that the funds issued for this are identified as "damages" for IRS purposes. By executing this agreement, this substantiates as your "receipt" of being reimbursed for damages.
Why should I consider granting an easement in the first place? The current drilling and production activity in North Louisiana has resulted in an ever-growing number of new wells drilled. If a landowner has been approached for the granting of a pipeline right-of-way, the chances are that he/she are being asked for the right to transport the very natural gas (or oil) from which he/she expects royalty payments. There is a need for new infrastructure in the petroleum industry. Without it, simply put – NO ONE GETS PAID.
How do I clear the title to my mineral rights? How long does it take to receive my first check? If petroleum can be produced in commercial quantities on your land, it is time to clear the title to mineral rights. You should consult with an attorney or other land professional to assist you in handling this. The Department of Conservation must receive official notice of the first well completion. After a well is drilled and completed, the oil and gas company must have an abstract of title prepared, in which copies of the property's records are obtained by the abstractor. Then, the abstract of title is provided to an attorney for examination of title to all mineral rights in the well. Prior to an attorney rendering the final title opinion, any ownership questions or discrepancies must be resolved. This process can take several months to complete. Once finalized, the title opinion reflects the current ownership of the surface and mineral interests. From this, the well operator prepares a division order for each royalty owner in the well. The royalty owner should check his division order received, to verify the ownership decimal interest is shown correctly. This entire process, from abstract of title to delivery of division order, may take anywhere from 6 months to 1 year after completion of the drilling of the well.
What does the word "Ilios" mean? The greek word for the sun is Ilios. We recognize the sun as the source of all fossil fuels.
When are royalty payments suspended? For your protection, payments are suspended upon a title dispute, the assignment of interest, notice of death, transfer of property, or in the event of no known address. Keeping your information current can prevent this inconvenience. If you any questions about your royalty payments, you should contact the operator of the well.