My family and I have recently inherited 320 acres in Karnes with 100% royalty and 100% surface rights. We have also aquired 170, 145, and 150 acres in Karnes with 25% royalty only. The lease on the 320 acres is going to expire this January unless they begin to drill on the land.We have had an offer to sell the minerals and land but we refused because I heard that was a big no-no this early in the game. I just wanted to get some information. What is the current rate right now? How many rigs can be put up on a piece of land this size? I have heard that most rigs run around a 600 acre section or can you put more on the land? What is the average production they are seeing in this area and how much can we expect to receive? We are planning on visiting Karnes sometime this month to get some more information because it is so hard to find out anything from this far away. This is exciting news for my family but, we want to do this the right way. Any info is greatly appreciated.
we have only just above 100 acres and they had made a comment on possibly putting several… up to six if I can remember correctly.
Dear Mr. Bowman,
I have represented two landowners, one with a tract about the size of yours recently. As of pretty much right now, $10K per acre for smaller tracts, $6K per acre for acreage.
Buddy Cotten
AJ Bowman said:
My family and I have recently inherited 320 acres in Karnes with 100% royalty and 100% surface rights. We have also aquired 170, 145, and 150 acres in Karnes with 25% royalty only. The lease on the 320 acres is going to expire this January unless they begin to drill on the land.We have had an offer to sell the minerals and land but we refused because I heard that was a big no-no this early in the game. I just wanted to get some information. What is the current rate right now? How many rigs can be put up on a piece of land this size? I have heard that most rigs run around a 600 acre section or can you put more on the land? What is the average production they are seeing in this area and how much can we expect to receive? We are planning on visiting Karnes sometime this month to get some more information because it is so hard to find out anything from this far away. This is exciting news for my family but, we want to do this the right way. Any info is greatly appreciated.
Thanks for the info. So is it in the best interest of the company who currently has our lease (and has for the past 5 years) to drill before the lease runs out in January? Should we be hoping for them to drill or not, so that we could regotiate with better terms???
Mr. Bowman,
It depends on the company. If they are operators in horizontal drilling, they will likely try to protect the acreage.
If they are not, they will hope to get a horizontal operator to come in and drill it. 5 years ago there was no Eagleford Shale production. Your lease form may need to be modified. I modified several for clients in Karnes County - Conoco/Burlington took the assignment and needed the horizontal language.
Your lessee has had the property for 5 years and have done nothing. If you are like everybody else I know, you are not getting any younger. I hope that you get a chance to lease anew with a good form and good representation.
I am working a top lease on some rights in karnes and one of the sticking points is the signing money due to the continous drilling clause in my current lease. Any thoughts on what a fair percentage or price per acre is on the initial payment at signing
How much time left on the lease?
Eric Siebold said:I am working a top lease on some rights in karnes and one of the sticking points is the signing money due to the continous drilling clause in my current lease. Any thoughts on what a fair percentage or price per acre is on the initial payment at signing
Expires sept 17
Mr Cotton the lease expires september 17. Been negotiating for a while and came up with a deal that encourges production which I suggested and am fine with. 4300 per acre year one if no completed well in 12 months 1k acre penalty and the same after 24 months. 25 percent royalty 320 pool and no transportation costs. All that is agreed to finally. I asked for 10 percent upfront based on what I heard was the norm. They came with 10 percent in escrow and said if the lease came available and they declined then we would get that. They said ther is a 99.9 percent chance they would take the lease. I told them it would not make sense for me to take it off the market with no guarrantee nor any money upfront. They cam back with a figure of up front money I am waiting on confirmation if it is 5 percent or 2.5 percent because I am not sure if they meant a total of that amout or each being that I have half of the rights and my uncle has the other half. Any thoughts on this would be appriciated feel free to tell me if my incentive plan is dumb.
Dear Mr. Siebold,
Not dumb at all. What you really have is $1000 per acre rentals on a rental lease form.
The cajuns across the Sabine in South Louisiana have been doing this for years. Theory being is if it is worth $XX for the first year, then it is worth .5$XX the second and third years. Actually, the bath rental form has an wonderfully flexible rental provision. You put in dates, and amounts, rather than anniversaries. For example, first rental due 8 months from signing, second rental due 18 months from signing and third rental due 22 months from signing, etc.
I do agree that it is crazy to give an option with no money today.
If your acreage position is large enough, you may want to consider a retained acreage provision.
Mr. Cotton thanks for your insight. They didn’t want to go for much more than 4k but promised they were not like all the rest and wouldn’t wait until the 35th month to drill so I asked them to put their money where there mouth is and finnally got them to agree to it. Just need them to agree to the upfront money just not sure what the norm is on something like that I want to hold my ground but want to do so with a fair number
Kathy L Chapman said:
Again, up-dating my own posting for Karnes County. My clients signed today for $6000/acre bonus - 25% royalty.
Are they moving East to West in Karnes Co.? We have land just west of Falls City and right over a deep pocket of honey oil… yet it seems ho hum…? Anyone have any ideas on this area?
Faith Duncan said:
Last year I inherited my mineral rights and am working to finish an affidavid of heirship. My mother had leased the rights to Petro-Hunt on a 3 year lease. We are about 1 1/2 years into the lease and I keep hearing what a hot spot Karnes Co. has become. So many people have offered to buy my rights. I'm trying to find out where the land is located and learn more about if they are indeed drilling on my portion of land. Anyone have solid advice on how to find out all the info I need on my mineral rights without having to pay an arm and a leg to find out?
Hi Natasha,
Can you please recomend me an attorney?
Regards
How much is an acre going for in Karnes county at this time? I have 5 mineral acres to lease out and I am looking for the best deal I can get. Who would I go to?
Donna - I hate to say it all depends, but it all depends on lots of factors, including:
On location. Is the property around yours leased? If so, and you are one of the pieces to make the puzzle complete, the price can be unusually high. If you are out there by yourself - and no leasing around you, it can be lower.
You need to check around with your neighbors. Katherine Chapman
AJ,
Is any of your land still currently unleased?
AJ Bowman said:
My family and I have recently inherited 320 acres in Karnes with 100% royalty and 100% surface rights. We have also aquired 170, 145, and 150 acres in Karnes with 25% royalty only. The lease on the 320 acres is going to expire this January unless they begin to drill on the land.We have had an offer to sell the minerals and land but we refused because I heard that was a big no-no this early in the game. I just wanted to get some information. What is the current rate right now? How many rigs can be put up on a piece of land this size? I have heard that most rigs run around a 600 acre section or can you put more on the land? What is the average production they are seeing in this area and how much can we expect to receive? We are planning on visiting Karnes sometime this month to get some more information because it is so hard to find out anything from this far away. This is exciting news for my family but, we want to do this the right way. Any info is greatly appreciated.
Kathy, are you still working in the Kennedy area, and if so what kind of retainer fee do you charge?
said:
Kathy L Chapman said:Again, up-dating my own posting for Karnes County. My clients signed today for $6000/acre bonus - 25% royalty.
I have for lease 4.018 acres on Bee County, located on Eagle Ford Shale.
And 53 acres on Duval County, also located on Eagle Ford Shale.
I need a lease royalty.