I'm new to the site and also new to the leasing business. I'm wanting
to find out what is are acceptable bonus and royalty amounts in Karnes Co.
I've just recently been offered $3500 per acre plus a 20%. The company
is an investment co. and will just turn around and sell it. Any help will be
greatly appreciated. CSM
I just got $10,000 an acre for a client in Karnes and 25% royalty.
Now I am really depressed. When I signed my lease with EOG back in June 2009, I received $350 per acre and 25%. If they exercise their option, I'm stuck for another 3 years at $350. My land is in the M. I. Leal Survey just a 1/4 miles north of the intersection of Hwy 123 and CR887. CSM - The $3500 per acre sounds very very good but you definitely want to do your due diligence. Don't know how many acres you have but at that price I suggest that you spend a little of it and seek the advice of an attorney familiar with O & G leases. Good luck.
I am in agreement with Mr. Baird. I am happy for you as I am in similar circumstances as he is. As recommended, do what I say not what I did(or actually didn't do). Invest in a good attorney to help you from the get-go. It will be well worth your investment. I waited till later, and wish I had. But, I am still very grateful just for what may possibly develop from all this. Hey, and Mr. Baird, you didn't do so bad. I mean, 25% is better than my 20%--smile.
Mark,
I truly believe you could get more than $3,500 per acre for your mineral lease. You are in a better spot to find oil. I know this because in 2010 I entered into a lease with Hilcorp who sold their interest to Marathon this year. I got $8,000 per acre with 25% royalty. I am much futher south of you in Kenedy Texas in the "wet gas" area. So I know these companies are willing to pay good money for leases in certain areas. If they fail to drill before their lease expires you should ask for a completly new lease instead of renewing. These big oil companies make it a common practice to "low ball" land owners hoping they will jump at the offer. I fell victim to this back in 2007 when I entered into a lease with Pioneer Natural Resources for $250 an acre with 22% royalty. This was before I knew anything about the Eagle Ford Shale and the potential it had so I have been kicking myself for jumping at this "low ball" offer. The good news is that their lease expires in March so now that I am more "educated" on the Eagle Ford Shale I know I can get a much much better deal this time around.
Mark A. Baird said:
Now I am really depressed. When I signed my lease with EOG back in June 2009, I received $350 per acre and 25%. If they exercise their option, I'm stuck for another 3 years at $350. My land is in the M. I. Leal Survey just a 1/4 miles north of the intersection of Hwy 123 and CR887. CSM - The $3500 per acre sounds very very good but you definitely want to do your due diligence. Don't know how many acres you have but at that price I suggest that you spend a little of it and seek the advice of an attorney familiar with O & G leases. Good luck.
Richard:
Appreciated all of your comments and those comments of everyone else. I need to point out that I made a mistake in one of my earlier postings. My royalty with EOG is 20% not 25%.
Mark
Richard Cash said:
Mark,
I truly believe you could get more than $3,500 per acre for your mineral lease. You are in a better spot to find oil. I know this because in 2010 I entered into a lease with Hilcorp who sold their interest to Marathon this year. I got $8,000 per acre with 25% royalty. I am much futher south of you in Kenedy Texas in the "wet gas" area. So I know these companies are willing to pay good money for leases in certain areas. If they fail to drill before their lease expires you should ask for a completly new lease instead of renewing. These big oil companies make it a common practice to "low ball" land owners hoping they will jump at the offer. I fell victim to this back in 2007 when I entered into a lease with Pioneer Natural Resources for $250 an acre with 22% royalty. This was before I knew anything about the Eagle Ford Shale and the potential it had so I have been kicking myself for jumping at this "low ball" offer. The good news is that their lease expires in March so now that I am more "educated" on the Eagle Ford Shale I know I can get a much much better deal this time around.
Mark A. Baird said:Now I am really depressed. When I signed my lease with EOG back in June 2009, I received $350 per acre and 25%. If they exercise their option, I'm stuck for another 3 years at $350. My land is in the M. I. Leal Survey just a 1/4 miles north of the intersection of Hwy 123 and CR887. CSM - The $3500 per acre sounds very very good but you definitely want to do your due diligence. Don't know how many acres you have but at that price I suggest that you spend a little of it and seek the advice of an attorney familiar with O & G leases. Good luck.