I am new to the forum, however, I have been approached about a mineral. The company is not a major and is offering 1000 to 1200 per acre plus 25% royalty or 22.5%. 3years with a 2 year option. My neighbors leased 2 years ago and now have options at $75 per acre which were exercised by the company. Somehow, they missed me the first time around. Any ideas or thoughts? I am in northwest Lavaca county with about 100 acres? Please chime in as I am a neophyte to this process.
you might look over on the Fayette county page. they have a very active group over there with a thread about leasing that has been going on for about a year. It does sound like you are in a good area Gonzales county is also very active right now and everyone is waiting to hear the results of 2 wells drilled and recently completed near Flatonia. The 22 - 25% royalty seems to be a very common going rate. Over in Wharton county I am told it is the standard rate that both owners and producers will agree to. There are a lot of things to consider when negotiating a lease, so root around in the various discussion threads and see what questions have come up and how they were awnsered
I have essentially the same situation as you do. I have 86 ac in northern Lavaca Co. and have been offered the same royality (25 &22.5) and bonus(1000& 1200) for 3yrs with a 2yr option. Much of the surrounding ac. has been leased in prior years for 350 an ac. and is now on the 2 year option which exspires in Mar 2013. The lease form I have been given has some features I wish to modify or remove ( such as where fracking water is obtained and consideration of depth restrictions etc.) . I am in the process of getting legal advice on the lease wording and have not come to a conclusion as to what I will do.
Has anyone been contacted about leasing south of Hallettsville . A real O & G company ( not a flipper ) called me this week and wanted to know where my place was South of Hallettsville . They said they were interested in leasing South of Hallettsville. I gave them the location and they said they would get back with me .
Wayne. I am continuing to have dicscussions on my 86 ac in northwest Lavaca Co. I have joined with a neighbor who has 120 ac in an attempt to see if we could get a bonus increase if not we may stay unleased. Leases have gone up in the last three years from 350 ac to 1000 ( 1200also). Drilling has come closer and siesmic work in the last year has been heavy. It seems to me that unless there is bust in the findings west of us we may have reason to wait. I have learned much about what should be in a lease protecting the mineral owner so I suggest you see a lawyer you believe has experience (possible with his on land). He can give you some don’ts especially since the wells around here are very deep wells and fracking has much that is different than vertical wells.
Well when I try to reply to a post it says I need to join this group. I clicked on join now and this reply box opens up so I guess I will just try to use it.
My question has to do with the 25% and 22.5% royalty offers. Are you folks saying that the 25% goes with the $1000 bonus and the 22.5% goes with the $1200 bonus? Just wondering because the difference of 2.5% in royalty could be quite significant and i'd even say they would offer it this way to try to entice mineral owners to accept the larger bonus with the smaller royalty %age as I believe it would be to the O&G companys advantage. If thats the case I believe i'd have to go with the 25% royalty. I also believe the $1200 and $1000 seems kind of low and I think you should be able to get 3 yrs with no option. In my opinion if you take an option it had better be a darn good offer which would be far greater than any they have offered in the "old days" or even some they seem to be offering now. Can I ask what they are offering on the 2 year option? Opinions on this appreciated.
The option is for 2 years at a 1M per acre. Same as original 3 year bonus. I agree with your assessement about the percentages. The 2.5% could be significant.
Here's a good link to use (I think) to see the difference in the 22.5% or 25% royalty offers.
Try putting in some figures of what might be an average well around your area and see what the difference in the 2.5% royalties would be. If my math is good the $200 difference in the bonus money for 100 acres would be $20,000, correct? How long would it to make that up on a decent well with the higher royalty percentage?
I'd be interested in anyones thoughts on this.
Wow, that is great information.
Thank you so much chiming in-
I too am interested in others thoughts.
Please add to the discussion.
We are in a line east of Yoakum, south of Hallettsville. With a good oil/gas attorney, we signed a 3 yr lease. Over $2,300/acre. 25% royalty. Recommendation is NOT to sign a lease with an additional option. By the time the 3 yrs is up, leases may be going for much higher, especially with improved infrastucture in place. Most important, don’t sign any lease without a good attorney that knows the oil/gas business.
Hi Nancy,
Are you located due East of Yoakum, close to Koerth and north of Hope? Just asking because i have property near Terryville and haven't had any interest. Great lease amounts, by the way!
John
Nancy Hoffman said:
We are in a line east of Yoakum, south of Hallettsville. With a good oil/gas attorney, we signed a 3 yr lease. Over $2,300/acre. 25% royalty. Recommendation is NOT to sign a lease with an additional option. By the time the 3 yrs is up, leases may be going for much higher, especially with improved infrastucture in place. Most important, don't sign any lease without a good attorney that knows the oil/gas business.
For you folks interest in the well drilled by Zaza at Appletts hill . The I P rates filed by Zaza to the RC on their W-2 showed 120 bbls oil PER DAY ,3MMCF Gas PER DAY AND 1,000BBLS OF WATER PER DAY ,which I am told is water flowing back from the frac job . I am sure everyone in this area was hoping for a lot better oil rates than 120bbls/day .
it might be too early in the process to tell how this well is going to produce once it settles down. 30 gallons of water per minute are comming out of the well we will just have to wait and see
Thanks for the reply . It would be my guess that the ,mud log ,electric log ,side core ,etc.etc. taken in the test well showed a lot more promise than they are currently seeing . With all this info and the flows they are seeing makes you wonder why they went further east to Vstien.
Andy G. Grubbs said:
it might be too early in the process to tell how this well is going to produce once it settles down. 30 gallons of water per minute are comming out of the well we will just have to wait and see
I would see if you could do a little better… geosouthern is the company I recently signed with. but I am east of Shiner actually
There is a ton of info on the internet as it relates to leasing , There is one site " eagle ford — blog " that has a check list that list all things you should do when leasing . This is a complex play and it takes a company with a lot of know how and dollars to drill a succesfull well . You can not poor boy these wells. It appears you are on the right track ,getting educated on the play and checking with your neighbors on what they received . This blog also has a lot of good info.
yes, little slip-ups by the drillers or other crews working the well can seriously affect the outcome
patrick said:
Thanks for the reply . It would be my guess that the ,mud log ,electric log ,side core ,etc.etc. taken in the test well showed a lot more promise than they are currently seeing . With all this info and the flows they are seeing makes you wonder why they went further east to Vstien.
Andy G. Grubbs said:it might be too early in the process to tell how this well is going to produce once it settles down. 30 gallons of water per minute are comming out of the well we will just have to wait and see
I just received a preliminary offer on 122 acres located southeast of 77/111 crossroads. Leasehound said “the company” wants to drill based on info from logs of a dry hole 6 years ago. The “preliminary offer” of $200/acre, 3years, and 1/5 royalty appears to be a minimal offer. Has anyone else been contacted in this area or have knowledge of the average bonus rate being offered? Thanks for your input, John
What are the current offers you have heard in the Breslau area? We've been offered $200 an acre and 25% royalty. This seems awfully low. What are your thoughts and what is going on in the area? (We are not from the area but own some mineral rights.) I would really appreciate any help.
Marni
Nancy, You did fantastic! Can I ask who the oil company was? We have some property near there. Thanks so much. Kathy
Nancy Hoffman said:
We are in a line east of Yoakum, south of Hallettsville. With a good oil/gas attorney, we signed a 3 yr lease. Over $2,300/acre. 25% royalty. Recommendation is NOT to sign a lease with an additional option. By the time the 3 yrs is up, leases may be going for much higher, especially with improved infrastucture in place. Most important, don't sign any lease without a good attorney that knows the oil/gas business.