I've received an offer to lease my small interest in Section 8, Block A-12, Gaines County. 1/4 royalty, 3 year lease, $500 per mineral acre. Others in my family think $1000 per acre is more in line in the area.
What do you think?
ekl
EKL, I agree with your relatives that $500 is too low, although it may not be as high as $1000/nma. I've attached a screenshot from DrillingInfo, and you're in the leasing trend for A-12. This shows all the activity in the past 6 months. The players are Forge, Sheridan and Fortuna. I'm surprised they didn't request a 2 year option. They may ask for that in exchange for a higher bonus.
Hi there, I'm new to the forum. I recently discovered (after a leasing company contacted me) that I own mineral rights in Gaines County. It's not much, 2.333 acres in Section 92, Block H, just west of Cedar Lake. I was offered $450 per acre, 20% royalty and a 2 yr option to renew. I have no idea if this is a fair price for the current area and market and I'm hoping some of you in this group might have some info on that. I would really appreciate it. Thank you!
Hello Caroyl. WELCOME TO MINERAL RIGHTS FORUM. After viewing the GIS map I find no activity or production in this area. In the past there have been some active oil wells and gas wells. The nearest production at this time is 3-4 miles to the East and Southeast of Section 92. I would say that the $450 per acre bonus money and 20% royalty is a fair price per acre in this area of Gaines County
GIS Map of Gaines County Section 92/Block H/A-568 and surrounding area:
CLICK ON MAP TO ENLARGE
Clint Liles
Hey Clint,
Thanks for your response! One other tidbit I might mention...my interests lie in the southern half of that section and last June a permit to drill was approved in that area. The operator is Pitts Energy Co and the lease name is Axem. It was approved to drill 13,900 ft and the formation associated with it is called Mississippean. Would this make any difference?
Caroyl, I do see where the permitted location is on the GIS map but on the approved permit I don't see where the well was ever spud(begin drilling). That date would show up in the STATUS area towards the top of the approved permit.
Link to the Axem well #3(API 165-38607):
I personally don't see where that would make any difference in bonus or royalty percentage.
JUST MY OPINION
Clint Liles
For Carolyn.
I have leased in the past year 5 different sections in Gaines County. For the most part these tracts are in unproven areas. I've insisted and received 25% and my own lease form. $450 may be reasonable, but 20% royalty is not. For most parts of Texas 25% has been the standard for quite some time.
Thanks again, Clint. Getting opinions is exactly why I'm here and I appreciate your responses! I'm wondering exactly how the permits to drill come into being? Some sort of survey is done I presume that shows potential? Do alot of permits never pan out into anything? Do all permits get drilled eventually? Just curious about how it all works.
Donald, thanks for your input as well. I had an inkling that the 20% royalty was low just from scrolling through numerous posts on this forum. Would you mind explaining what you mean by "insisted and recieved my own lease form"? Also, just curious, did your family come from this area (as mine did)?
Hi Caroyl,
By "insisted and received", I tell the landman, "I'm interested in your lease offer, but I need $550/acre, a 25% lease, and I have my own lease form."
Typically, the most resistance is on the bonus side, so we settle somewhere between their first offer and my counter offer. The 25% royalty is so normal it is accepted, and the lease form is subject to the lessee's edits -- still much better than the standard lease form.
Donald, that's great info! How do you come up with your own lease form? Does one need a lawyer for that? Do you have an example of one? Thanks again.
I paid an excellent oil and gas attorney to make it for me -- which is the best recommendation.
If you don't mind doing a little research, you can find a go-by from county records. Look for one from a seemingly oil and gas savvy grantor. Many Texas County records are available online. Texasfile.com is a good one.
Evening! I have been looking through old posts and have found some very useful answers so I'm hopeful someone may have a suggestion for me.
My family was approached, late 2016/early 2017 to lease our mineral rights. It appeared to be a good contract, but unfortunately the funding fell through,and we lost contact with the landman.
We have about 1000 acres in Gaines Co. League 284. If anyone has a suggestion, please reach out.
Thanks!
This Interactive Drilling Permit Map is easy to use. Enter a date range, click on the submit button, and then zoom in on your area of interest.
Gaines%20A-328%20Schleicher%20area.JPG
In looking at the area around the Schleicher lease, it appears Continental Resources has been doing the leasing for the last 16 months.
CONTINENTAL RESOURCES LLC P.O. BOX 2170 Edmond, OK 73083
Thank you for these suggestions, then were all very helpful. I spoke to Hunt Oil and Continental Resources and it appears we are out of their immediate interest, however, suggested to keep following up every few months, as interests change.
Anyone have any information on Oxy using a number of land companies to lease a large chunk of Gaines county? CO2 Clearfork project?
I recently rejected an XTX lease offer in A-1005. The bonus of $750/acre was generous for this part of Gaines, but we couldn't reach agreement on the lease addendum. I think XTX is leasing for Oxy in this area East and Southeast of Loop.