contacted for a lease on Section27 Block 34 in Dawson county, I live in Washington and am wondering if anyone can tell me what the going lease rate is for that area? Have always been told not to jump at the first offer.
I am not sure the location for Section 27, but the facts are that I have leased surface and mineral rights 10 miles west of Lamesa and 4 miles north of Hwy 180 for: $400/mineral right acre for 3 years with a 2 year option at the same price plus 25% royalty. The starting offer was $250/acre.
they’re offering $400/mineral acre, 1/5 royalty paid up lease, offer expires 10 days, actually only 3 days left, first offer now I wonder if I should accept.
any suggestions for lawyer? should I look for one in Texas?
I’d say it’s fine but get 1/4 royalty. Also let good O&G lawyer look at your lease before executing.
I would recommend you use someone out of Midland Texas an oil center close to Dawson County. Approx how many mineral acres are we talking about.
1.2121 net mineral acres
That’s not enough mineral acres to be out some legal expense. if you want to email me your lease I’ll take a quick look at it and tell you what I think. I’m no attorney nor am I an expert but I’ve read a few of them. If you want me to take a look at it, I’d be happy to.
http://www.txdirectory.com/online/person/?id=27271&office=22141
Castleberry is in Lamesa and one of the best.
Thank you, I’ve compared it to another lease that we’ve had in Beckham county OK and they were the same, so I’ve already signed. Thanks for all the help
Ms. Rose, from the coordinates you included, I would say you are in a fairly active area. I see many well applications in that area. I wouldn’t lease for less than $400/acre and 25% royalty. If the oil companies start discovering oil in your area, the price will only go up! Have patients unless you need the money.
I know that there is oil because of the past history on the land. Exxon use to hold a lease well before my time. My grandparents told me Exxon pulled out after a huge drop in oil and rough economy. Not sure of the time frame though. The guy providing information on the lease told me 400+ acre was offered sometime back but when I asked him to pinpoint how long ago - he stated a month or so. I have asked him to put his first offer on the table with real numbers. I will let you know what he says. As for time and money - every one wants money but you can not miss what you do not currently have 
… - as for time, I have have plenty and do not want to feel rushed. I feel that if it is a real offer it will be there tomorrow. More information on the land - was offered a lease at 400 per acre, 3 year w/2 year opt, w/a qtr royalty about a month and a half ago. The company pulled out at the last moment. Now this guy is telling me that it was chesapeake energy that withdrew the offer. - hhhmmmm… just seems odd that he would have details (or is it just me?) something seems afoot!
I have an offer for a lease - early stages. Offer is 20% royalty, 3 year with 2 year opt, and only 150 per net acre (just have not been told how many acres yet). A while back people asked me for the location of the property, I was only able to find these numbers: 32.583799,-102.194495 … will these work for property and shale location? Our neighbor’s lease a few months back was leased at 400 per net acre, 20% royalty, for a 3 year term with 2 year opt. Any thoughts and comments are greatly appreciated.
Emily:
word is that Chesapeake has moved on. There is considerably less activity activity in Dawson now, but I have heard some are still trying to secure leases. 400 per acre is the lowest I’ve seen for a 3 year there at a 1/4 royalty.
IMHO Chesapeake is highly unlikely to sell anything until things are proven up - especially in the unconventional horizontal oil play in the Permian Basin. In addition, the Permian Basin has multiple zones of interest - making the land grab even more lucrative if trends prove favorable. Yesterday, EOG CEO Mark Pappa said that they think the Wolfcamp horizontal oil play has 2.1 Billion Barrels of Oil - making it one of the largest - probably in the top ten oil fields ever in the USA. And it’s profitable to $60/bbo. Oil is far more profitable than gas, and NGLs are more profitable than gas, too. So, the liquids are very important to all players - but one has to know what one has in order to profit from it obviously.
David,
What about the leases that Chesapeake has already purchased? Have they sold them to another Pet. company?
My husband & I own property in TX. I want to lease all of our minerals to our property, but my husband refuses to sign the lease agreement. Would I need his signature on the lease if I want to lease all of our interest?
I have heard the term Wolfcamp or Wolfzone before - can someone explain that please. Was told that there was one on the property. From what I was able to read on it, it appears it is a mass underground, below the Sparberry, that runs across a large area where oil and gas are found. Does this not run throughout the bulk of the area?
Emily, the Wolfcamp is the geologic formation of interest because it is shale-rich and is thick and it is in the oil/NGLs window. There are other formations of interest above and below the Wolfcamp - which are additional and commingled. Case in point is the Spraberry - hence the term Wolfberry. Other zones of interest are the Cisco, Canyon, Strawn, Atoka, Clearfork, Ellenburger, Fusselman, Woodford, Morrow. The Leonard shale formation is a/k/a Avalon/ Bone Spring and it is prevalent in Dawson County and lies above the Wolfcamp. EOG refers to the Wolfcamp as the Leonard/ Wolfcamp horizontal liquids play. Google these terms and you’ll see a lot more info!
Last and certainly not least is the Horseshoe Atoll!!! This formation is famous already for being an excellent formation for EOR/CCS. Also, I’m excited about Residual Oil Zones (ROZ). These are zones of oil which lie below the oil/water contact where oil wells did not go much deeper due to water issues. Projections are that there may be an additional 30 Billion Blue Barrels of Oil potentially recoverable in the Permian Basin - thus equaling all production to date using Enhanced Oil Recovery/ Carbon Capture Storage. How about that?