Congrats and I wish you well. As to costs of production, I am unsure. Earlier in this thread, a cost free lease was mentioned: "Comment by J-F on November 30, 2016 at 11:08pm
…It looks like this was a good lease with favorable clauses for the mineral rights owner including for example a cost free 1/4 royalty, etc. Since the company has already invested in leasing some of this property you have some leverage to get good terms." Are you referring to the Cimmaron Landman as your friend, or do you have a friend who also happens to be a landman and is advising you at arm’s length from this deal? Is your attorney experienced in oil and gas law?
We have another Landman in Dallas who is a family friend. I used Harris Finley and Bogle in Fort Worth. I had one attorney for dealing with all the transfers and another for just this lease which was her specialty.
San Andres horizontals economic at $40 oil. “Hart Energy spoke with Terry Dobkins, president and CEO of Elk Meadows Resources, about how horizontal drilling is reawakening this historic play.”
“Houston-based Plantation Petroleum is turning to the Horizontal San Andres in Yoakum, Gaines and Hockley counties.”
The Texas RRC website shows Kinder Morgan’s “Tall Cotton” project produced 46,819 bo in Oct 2016. This is from land which never had any primary production! What are the odds that your minerals also contain an ROZ?
JP, Your minerals may require super-specialized legal representation. Just my two cents. Please keep the group informed as you can and will. Also check out DUROZ which does not require CO2 flooding. I have previously posted quite a bit of info on both ROZs and DUROZs.
I received an upfront bonus offer of $450 per net mineral acre in Gaines County, Section 408, Block G and a 1/4 royalty for a 3 year lease. Is this a competitive offer?
I just signed a 3yr.-25% royalty at $500 per nma. Sec. 220 Blk. G. I signed just before Christmas. When I asked a Landman to comment on the going rate he had seen $500-$1200 NMA.
I have received an offer in Sec 286 Blk G for $400/ac, 25%, 3+2 years (2 yr renewal @$100/ac). This block is not near (but between) currently producing wells.
Any ideas what are the thoughts behind an offer like this? As AJ has said possibly using ROZ or DUROZ? Would this be the San Andreas formations they are likely going after?
If they would be using one of these types of extraction techniques, are there any special clauses or considers in the Lease agreement to have?
N Case A lot of land has been leased up in Gaines to pursue the San Andres as a conventional target, incl. horizontal drilling, but not necessarily involving ROZs. I believe the operators are very aware of ROZs, however. The two year renewal at $100/acre seems bizarre: why is it not at the same $400/acre?
Received an lease offer in Sec 301 Blk G for choice of $300 net acre & 3/16 royalty OR $400 net acre & 1/5 royalty. This seems low. Any advice on counter?
AJ: yes the $100 was bizarre and currently they are now offering $450 for both Primary and the renewal terms. And yes they now told me the target is San Andres and targeting both ROZ and DUROZ.
No, and it is a mystery to my why there does not appear to be more competition for leases given the purported well economics of San Andres horizontals and the potential of ROZs in Gaines county.
I have a question on how best to run down an old Mineral Right claim my Grand Mother had in Gaines Co. I have a legal description but not successful in finding it on the Texas File site. Where should I begin if not there? Thanks Guys and Gals. Kelly