Hello everyone and thank you in advance for this forum.
So here it goes,
my mother received a lease offer from Riverwood Exploration in Shreveport,LA
it is 12.5 acre in the Beauford Allen Survey, A-37 Henderson County
Offer 1. bonus 100.00 per acre/ 5 year term./1/5 royalty.
Offer2. bonus 150.00 per acre/ 5 year term./3/16 royalty
Offer 3. bonus 200.00 per acre/ 5 year term. /1/6 royalty.
I have had advice all over the board ie, its a small tract so take the biggest royalty to hold out for a better offer if they want it they will come back with better.
David, the best bet on small acreage(or any acreage) is to always get the most for your royalty. It really doesn't matter in the long run what they paid you for a bonus. The real money is in the royalty. Its playing small stakes poker. More bonus...more royalty...if they drill a dry hole then all you got is the bonus. If they drill a big well the royalty from that will be huge compared to the bonus. Your call.
Do you own 100% of the minerals. If so you have a good bargain position, If not, you may be the last on the list for them. If you don't own 100% do you know how much? An advantage to a small tract is they will most likely give you a better royalty, but you will never get more than 1/4.
To the South of A-37 approx. 2 1/2 miles TDX Energy has a permitted location for a 9,000' horizontal wildcat well. The permit was approved in June 2016 but I'm not sure if the well has been drilled. I see no spud date(begin drilling) as of now. There are several older oil and gas well to the South and Southwest of A-37. Some of these wells were drilled in the early 1980's into the Rodessa and Cotton Valley formations. They are not real good wells but they just keep on producing. I agree with Carran that the real money is in the royalty percentage. Since there is no production nearby to A-37 it might be wise to accept what you have been offered or wait and hopefully some of your neighbors to A-37 will chime in as to how much they leased for. Some of the other producers to the South and Southwest of A-37 are Atlantis Oil Co., Perryman Oper. Co., Pike Oil Co., Blocker Expl. Co., and Southwest Operating Co.
GIS Map of Henderson County A-37 and surrounding area:
Carran, thank you so much for your reply . I am meeting my mom and she is giving me the packet they sent her so I can look over all the paperwork. would it say somewhere in this information how much my mom would own?? also the first offer is 1/5 royalty is that 20%? did I figure that right.
Clint , thank you so much for your prompt response. Your information is amazing. my mom is going to give me the packet they sent her so I can look over everything. my main goal is to do right by her.
