The Haynesville/Bossier Shale Play is a natural gas field that appears to be one of the greatest natural gas finds since the Barnett Shale around Dallas-Fort Worth, Texas. Energy companies are spending fortunes leasing the mineral rights from mineral owners in Northwest Louisiana and East Texas. It seems like each day the area included in this shale play grows as test wells continue to be drilled. With this newly found gas play, the Ark-La-Tex is and will continue to benefit greatly for years to come.
Benefits are already being seen in many ways. First, many local businesses are benefiting from the trickle down effect of mineral owners spending or investing portions of their lease bonuses and royalty monies locally. Second, many jobs are being created locally by the energy companies and many of the local companies which are being called upon to provide support services. Third, more tax revenues are being generated to be used by our local governments to provide public services. Finally, many local merchants, hotels, and restaurants are benefiting from the out of town workers who need these services as they work while away from home.
Many companies are aggressively competing to lease the mineral rights from local mineral owners. As a result of this competition, local mineral owners have seen lease bonus offers skyrocket from the normal few hundred dollars per acre to amounts exceeding $20,000 per acre. With this much money involved, we strongly suggest that you consult with a local attorney and a CPA.
It is very important to seek the services of a local attorney in the negotiation process. They will be able to help you to not only get the best deal, but also to eliminate clauses in your lease contracts that may later negatively impact you. Also, we would like to point out that you need to have your attorney look for depth clauses in your current lease contracts that were completed prior to the Haynesville/Bossier Shale discovery. If your attorney finds that your lease stated that the lessor could only drill to a certain depth, then the attorney may be able to help you lease the deep rights to your minerals. The deep rights are what these companies are interested in since the Haynesville/Bossier Shale Play is located below the normal Cotton Valley depths.
With all of the income that will have to be recognized from the lease bonus and future royalty payments, it is imperative that you seek the services of a CPA. A CPA will be able to determine what kind of tax liability you will be facing if you accept the proposed offer and will be able to provide suggestions concerning any tax and estate tax planning issues or opportunities.
It is important to note that a lease bonus is considered ordinary income and is currently subject to a maximum of 35% for federal income tax. If the lease bonus is Louisiana income, it is currently subject to a maximum of 41% for federal and state income taxes combined. If you chose to sell your mineral rights, this income would be treated as a capital gain. The maximum capital gain for federal is 15% and for Louisiana income is 6%. WE STRONGLY SUGGEST THAT YOU DO NOT SELL YOUR MINERAL RIGHTS BECAUSE WE EXPECT THAT YOU WILL DO BETTER IN THE LONG RUN BY HOLDING YOUR MINERALS AND RECEIVING YOUR LEASE BONUS AND MONTHLY ROYALTY CHECKS.
If you are in need of a CPA because the Haynesville/Bossier Shale has brought you a windfall, or if it has simply brought you or your company to our area to work, please call us at (903) 938-9255 and one of our partners will be glad to assist you in any way that we can. We can also recommend an attorney who is up to date on the payments, hot areas, and can represent you competently in the leasing process.
Sincerely,
Abney, Simmons & Company, P.L.L.C.
UPCOMING EVENTS CONCERNING THE HAYNESVILLE SHALE
Please check back for more updates.
WEBSITES RELATED TO THE HAYNESVILLE SHALE
Texas Railroad Commission
www.rrc.state.tx.us/
Haynesville Shale Sites
Below you will find a Yahoo! Finance Module that provides current news, stock quotes, and financial information about several of the major players that are drilling in the Haynesville Shale. To get a more comprehensive list of the drilling companies involved in this natural gas play, you might want to visit
http://oilshalegas.com/haynesvilleshalestocks.html.
