My family owns the mineral rights on 270 acres in dawson county, Texas in labor 12 & 13. We just got an offer from a landman to lease our rights in exchange for $325 per mineral acre plus 1/5 royalties. Is this a good deal??
I have read that this is in the one of the hottest oil regions in the country with the spaberry shale below us. Should we sign the lease? Any info would be helpful.
The going price 2 years ago was $400/acre for three years with an option for another 2 years at $400/acre plus 25% royalty. Get a lawyer. There are a couple good ones in Lamesa.
Hi Mr. Dunachek, I’m pretty sure that lately in Dawson Co the going RI is 1/4 or 25%. I’d be firm on that. I’m not sure what the very latest for bonus is, but I know about three years ago the average was $400 per land surface acre (not mineral acre). The devil is in the details - the legalese is very, very clever in lease agreements. Things like shut-in royalty, surface damage terms, pipeline installation terms, ROW acreage, etc. are extremely important to have market rates on - a professional familiar with Oil and Gas Leases and negotiating - should be utilized. An Oil and Gas Attorney or a Landman or Minerals Manager should be retained. It’s a harsh lesson to lock in a lease for decades on poor terms due to errors or omissions.
I hope this helps. The Mineral Rights Forum has a ton of information about leasing - it is one of the most popular topics. One can never have too much information!
Regards,
Ralpr
Mr. Dunacheck What is the legal description of your property? The other people who responded are correct. I wouldn’t take less than $400 per acre. If, you have a minute please call me at (432) 288-3577 Jonathon Pearson
My family and I signed a contract a few years back for $450 per net mineral acre and 20% royalties. You may want to try to negotiate a higher value and see if you can go up to 25% royalties. You never know if you don't ask.
Ralph,
I have had someone ask and I couldn't answer....surface vs mineral acres. If I own 10 acres of mineral rights and 100 acres of surface, what is the going rate?
Thanks....think you know all the answers, but sometimes some slip through!
LG
Ralpr said:
Hi Mr. Dunachek, I'm pretty sure
that lately in Dawson Co the going RI is 1/4 or 25%. I'd be firm on that. I'm not sure what the very latest for bonus is, but I know about three years ago the average was $400 per land surface acre (not mineral acre). The devil is in the details - the legalese is very, very clever in lease agreements. Things like shut-in royalty, surface damage terms, pipeline installation terms, ROW acreage, etc. are extremely important to have market rates on -
a professional familiar with Oil and Gas Leases and negotiating - should be utilized. An Oil and Gas Attorney or a Landman or Minerals Manager should be retained. It's a harsh lesson to lock in a lease for decades on poor terms due to errors or omissions.
I hope this helps. The Mineral Rights Forum has a ton of information about leasing - it is one of the most popular topics. One can never have too much information!
Regards,
Ralpr
Thank You everyone for your input. We're gathering up additional info on the property and will be reviewing our lease offer from the landman that contacted us. Good news, it looks like we have an additional 110 acres of mineral rights on another lease located adjacent to the property. Possibly some bargaining power as we will make up most of the pool?? Does anyone know how many wells would go on a this size property? Thanks again for everyone's help!!
Hi Jonathan,
Tried to ring you today, but got a message for a Brad?? Feel free to call me at 714-307-9808.
Thanks, Dave
Jonathon said:
Mr. Dunacheck
What is the legal description of your property? The other people who responded are correct. I wouldn't take less than $400 per acre. If, you have a minute please call me at (432) 288-3577 Jonathon Pearson
How do I pull up information on a well through the RR to see if it is producing?
There are several way to look up wells. If you know the Lease ID already, then you can use the Specific Lease Query. Its not very user friendly and you have to know in which RRC district the well is located. Here's a link. http://webapps2.rrc.state.tx.us/EWA/specificLeaseQueryAction.do
The GIS map viewer is probably the easiest option if you only know where the well is located and are able to find it on a map.
Here's the link to the GIS Map Viewer.
http://www.rrc.state.tx.us/data/online/gis/index.php
Click the map icon, let it load, navigate to your well, then click Identify and select Wells. Then hover over your well until a window pops up that displays the well API. Then click the well. From there click Production Data Query and the well production should populate.
Is there a specific well that you are interested in? I don't mind pulling it up for you if you have issues finding it. Unfortunately the RRC website isn't very easy to use.
I have the API Number, but a window does not pop up.
If you have the API number enter the last eight digits of it (leave off the 42 and remove any dashes and spaces) into the search box at the top right of the GIS Map viewer. That should take you to the well.
I am also in Dawson Co. in Labor 12 & 13 in League 276. They have recently offered me $350 per acre and 1/5 royalties... Who is the land co. offering to you? Were you able to establish a better deal?
I signed my lease 2011. It was for $450 with 1/5 royalties. What they offered seems like a pretty normal first offer. I would counter and work them up. Don't take less than $450 and try to obtain 1/4.
Kristen,
Definitely try to work up the royalty percentage! The signing bonus is low too but that royalty % is where the real money might be. Things seem to be heating up in Dawson county so I don't believe you'd have to wait long if the o&g walked away. Plus with that much acreage you have better leverage.
The first two companies that offered ended up walking away. I'm glad that I held firm because then I did end up with a better offer in comparison to the first ones.
thanks for the advice... I am trying to figure out how much acreage this is and where it is located... but no one I've talked to is familiar with "Labor & League" any tips?
Earnest said:
Kristen,
Definitely try to work up the royalty percentage! The signing bonus is low too but that royalty % is where the real money might be. Things seem to be heating up in Dawson county so I don't believe you'd have to wait long if the o&g walked away. Plus with that much acreage you have better leverage.
I have access to drilling info. and there is alot of activity in Dawson Co. Do you understand "Labor & League?"
Emily Rose said:
The first two companies that offered ended up walking away. I'm glad that I held firm because then I did end up with a better offer in comparison to the first ones.
Go to the texas railroad commission site to the map viewer. In the visibility box(top left) check a) original Texas land surveys, and b) 7.5 mile quadrangles. Then zoom in on Lemesa. Keep zooming in until you see numbered boxes show up. The section number is in pink in the corner and the labor #'s are in yellow. I believe you are in glasscock in Lemesa south. Sounds like the same property as ours. We may be related. Are you related to the McHenry's? Is your landman Al?
kristen tyra said:
I am also in Dawson Co. in Labor 12 & 13 in League 276. They have recently offered me $350 per acre and 1/5 royalties... Who is the land co. offering to you? Were you able to establish a better deal?
Yes, my grandmother was Willie Mae McHenry. I am dealing with Samantha at NTex Land.
David Dunacheck said:
Go to the texas railroad commission site to the map viewer. In the visibility box(top left) check a) original Texas land surveys, and b) 7.5 mile quadrangles. Then zoom in on Lemesa. Keep zooming in until you see numbered boxes show up. The section number is in pink in the corner and the labor #'s are in yellow. I believe you are in glasscock in Lemesa south. Sounds like the same property as ours. We may be related. Are you related to the McHenry’s? Is your landman Al?
kristen tyra said:I am also in Dawson Co. in Labor 12 & 13 in League 276. They have recently offered me $350 per acre and 1/5 royalties… Who is the land co. offering to you? Were you able to establish a better deal?