By now, everybody living in the Shreveport/Bossier area has heard about the natural gas deposits in what is called the Haynesville Shale formation. Everybody and his brother has been offered a contract to lease their mineral rights which is throwing a nice little kink in listing and selling real estate.
Many people have already signed on the dotted line for a signing bonus and the hope of future royalty payments without consulting a lawyer or even their neighbors. Heard tell of one landowner with 40 acres who signed for $250/acre. Now rumor has it people in his area are selling for upwards of $9,000/acre. Ouch!
There are also neighborhood associations who are organizing to negotiate as a group which is a smart thing to do to protect your property value and, let’s be honest, to have more negotiating power when it comes to the money. But we don’t have to reinvent the wheel. Ft. Worth has experienced just what we are in the beginning stages of, and they are eager to share experiences and what worked for them.
As far as real estate transactions go, the fact of the matter is that most people don’t want to buy a house without the mineral rights intact, and some savvy sellers are using this as a negotiating tool. More than likely these days, if you look at a listing, somewhere in the paperwork, it’s going to say that mineral rights are reserved. Even if mineral rights aren’t mentioned in the listing, it would be wise to find out if the seller has already leased them.
Another twist is that if production from the Hayneville Shale is as huge as the drilling companies think it will be, there will be “urban” drilling. This conjures up the image of buying a nice little house that happens to be next to a vacant lot, and next thing you know, you’ve got a drilling rig for a neighbor. Yikes! It has happened in Ft. Worth, so don’t laugh.
In fact, Tom Dark, Shreveport’s Chief Administrative Officer, has addressed this in interviews with the press. There have been several town hall meetings to discuss just what this is going to mean to those of us living within the city limits. We all want a check, but we all want to protect the value of our property as well.
While all these lease and royalty payments and production of all this natural gas will be a real boon to the economy, it has given us Realtors another facet of our business to become educated about, and quickly. I’ll keep you updated as I learn more.
