Shreveport Shale

The Haynesville Shale natural gas drilling development has put a lot of money in hands that are unfamiliar with resting in such deep pockets. Before signing your first land leasing offer or collecting your first royalty check, make sure you are well versed in land drilling precedents. The Haynesville Shale is not the first natural gas reserve to turn ordinary country folk into a well-to-do community. It is important to practice safe money management habits, knowing exactly what kind of profits you can be expecting and for how long before making any major long term purchase decisions. All too often, a fortunate financial windfall results in eventual debt as people either invest or spend beyond their means. Use the following advice to maximize the money you can get out of your good luck:Don’t negotiate your lease alone Compare with neighbors, friends and fellow townsmen to make sure you are getting a raw deal on your initial lease. If there is a local neighborhood association in place, be sure to bring it up at a meeting or in a newsletter. The more information made available to you and those around you the better.Tax laws still apply If you are fortunate enough to be offered a large signing bonus for leasing your property, don’t immediately spend it all without planning to repay Uncle Sam. Bonuses are taxable in varying degrees depending on your tax bracket. Know how much of the upfront money you will need to allocate for taxes before proceeding with your purchase plans. You don’t want to be stuck owing money you’ve already spent to the government.Natural gas isn’t forever Planning out your long term retirement and financial requirements should not heavily depend on royalty payments from natural gas companies. Natural gas sites have a lifespan and royalties are generally paid in a percentage of output. Drill sites are often most productive during their first few years so don’t come to expect the large payouts you initially see to stand the test of time. They will decrease as years pass and eventually run out, so appreciate the checks as they come but don’t bank on their long term value as part of your financial planning.