Oil & gas discussion group for those interested in Hockley County, TX. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.
I was contacted last week by Trinity Oil & Gas Exploration, LLC out of Shreveport, LA.
They are offering $300 per acre + 20% royalty for a 3-yr lease and a 2-yr option.
Is anyone else seeing any action in Hockley?
Thanks,
Ernie T
Received the same initial offer from a different firm a few months ago. Our location is near Arnett gin. What is your location?
I have no idea JW, the legal description is rather cryptic and I didn't even know the family owned these rights until recently.
I had an offer from BC Operating Co. out of Midland for $200 per acre, 20%. Property is located in League 723, Labor 13, State Capitol Land Survey. (Wherever that is)
Mr. Cato - that location is about 4 or 5 miles SE of Whitharral in the North Central part of the county.
Thank you. I had a hard time with the maps in the RR Commission site. Couldn't get them to accept League and Labor.
If you zoom in on the RRC map you will be able to see the leagues. When you find your league, zoom in some more to find the labor.
I'm new at using the RRC system. Which map were you on?
Good point! There are lots of maps. Coincidentally, I also have rights in the State Capital Lands. So I like to check them out occasionally through the following mapping tool. The way I do it is I go to the RRC site and click on Data in the main menu. Then scroll down and click on "online research queries". Then launch the application in the first little box that says "Public GIS map viewer" (Note that there is another box there that allows you to search for new permits, which you will want to do if you sign a lease :) So, scroll down and find Hockley County in the Map Viewer. I don't know why, but sometimes nothing happens until you push the little arrow thingy (>) next to the API # button.This should send you to Hockley County where you can scroll around and find your land.
Let me know what you think and if it works.
Got it. Thanks. Does anyone have information on the bonus and royalty being given in the northern part of the county? I know the southern part is more active. Seems like 200 and 1/5 is a little low.
George:
There is a lot of decent Clearfork production in that general area. These have typically been "vertical" wells. 200 and 1/5 is fairly typical there. HOWEVER, they will almost always negotiate, depending on how bad they want it. You might get as high as $350 on bonus, or better yet, you might get them to come up from 1/5 to 22.5%. Give it a try.
Thanks. I'll let you know what we settle on.
In their May Investor Presentation, Concho Resources revealed that they had been leasing up acreage in Terry and Hockley County. Here is a link to their presentations page (choose the May Investor presentation):
http://ir.conchoresources.com/phoenix.zhtml?c=211775&p=irol-presentations
This presentation also has a good map showing their area of interest in Hockley County.
I was able to up the royalty to 22.5% and the bonus by about $75 per acre. (Since my acreage is small, bonus not that important) I also negotiated several clause changes.
I got an offer of $250/acre, 3/16ths royalty. Royalty seems low to me, what do you all think. Is this a fair bonus ?
Hi Texas. $250/acre and 3/16ths seems lower than what has been offered over the past year. Best thing to do is contact an attorney and have the attorney review the offer and make a counter offer. Won't cost you much to do this and if the company is interested in leasing your land, they will come up to market rate.
The following link, from a large acreage being offered in Terry & Hockley counties, gives some very good maps, geology and information about activity to date:
http://www.albrechtai.com/divestments/Smith%20Energy%20Brochure.pdf
Thanks for the link JW. I read the report and the information about the production of the wells is enough to make me want to throw up. Vertical wells drilled 9000 ft deep only producing 20 barrels per day from an initial flow. I think we have a name for a well that starts out at 20 per day and will drop to 10 bpd in 3 months. The name for that kind of a well is a stripper well. I can't believe that companies are gonna sink that kind of money into stripper wells.
Wildcat by PPC Operating Co: Green Lantern well 10 miles SE Levelland:
PPC OPER. CO. LLC WILDCAT (O/G)DRILL(HORZ) Well# 1H GREEN LANTERN, 323 FSL 500 FEL, SEC 24, MCCULLOCH CSL/LOT 8 SUR., A-157 12000', 10 SE LEVELLAND