My family is getting an offer for mineral rights in Ector County. I am unaware of activity there. Anything new going on?
I see 3 approved permits for Ector County since Jan 1, 2013…Founders Oil and Gas has 2 approved permits(API 135-43946 & 43947) for Section 25/Block 15/A-927 and Acoma Operating has 1 approved permit(API 135-43955) for Section 18/Block 45T2S/A-615…all three are vertical wells…at this time I see no spud(begin drilling) report for these three wells. What is the exact location of the minerals your family owns?
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Section 34, Block 42, Township 2 South. It appears the area is inside the city of Odessa, with drilling already in place all around it. However, it is a residential area. The expressed interest is from a landman, so I am guessing a company wants to do a horizontal well.
Update. The offer from the landman is $1250/nma, 5 year lease, 20 percent royalty.
I WOULD CERTAINLY TRY TO GET THE ROYALTY UP TO 25%…there are some good horizontal wells in the Eastern part of Odessa
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Thank you, Clint. Here’s the full offer: a) 17,500 for sale outright (each of us owns 1/4); b) sell half, lease half, 8750 cash and the 1250 nma, 5 year lease with 3 year extension at company’s option that would be 1,776.94 bonus for each of us; 20 percent royalty c) lease only 1250 nma, 5 year lease, 3 year extension at company’s option, 20 percent royalty; that would be 3,553.88 bonus for each of us
Your offer is under priced and your royalty percentage is too low. Minimum 25% on your royalty is now standard.
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There’s a lot going on there. Your offer was way too low.
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That’s what I’ve been told by others, so thank you for confirming.
The land man has increased the offer (last ditch offer were the words he used) to 25 percent, no production costs, 3 year lease 2 year extension at the company’s option, and 1200 per net acre bonus.
2 year extensions are not ever good for the mineral owner. You are the only one on the hook at extension time. Things are bad, they walk and you get nothing. Things are hopping, they have you locked in on a low extension price they they extend you at that price. At that time they have 2 years to sell your lease and make the big bucks. Besides, if they haven’t drilled you in 3 years, why give them 2 more?
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