I was offered an oil lease on the acre of land in which my family resides. I don’t know anything about mineral leases. I am not sure how much is a good price for a signing bonus or what to expect as far as royalties go. Although I do not have very much land, I want to make sure I am informed enough to protect my family. Any help or advice is greatly appreciated.
Ask for $850-900 an acre, 25% royalties Gross at the wellhead. Do not settle for Net. 3 year lease seems to be the standard lately. That is a good starting point.
Thanks for your response. It is very helpful. How many years would you recommend for a lease?
3 years seems to be the standard lately. Some companies are also asking for a 2 year option at the end of the initial lease.
In reading a contract, how should the terms " 25% royalty at the well head" written so that I can be certain that's what I am agreeing to.
thanks
John,
It should be spelled out in the first few paragraphs. It will state something to the effect that royalties paid are before/prior to production cost such as trucking/pipeline, Chemical and associated expenses. Every company has a different way of stating it.
Where are you located? If your close to Bryan, I would be more than happy to read over your lease to make sure they are treating you fairly. You are welcome to call me tomorrow. 979-402-9363
Bill
I am a mineral owner in Brazos County along with 218 other counties in Texas and just want to make sure folks are treated fairly.
William I can call you tomorrow and would be happy to email u the proposal.
John, Good Morning!
Look forward to your call. I live in the country so cellular service is less than tolerable so please leave a voice mail or text me and I will go out on the porch and give you a call.
Bill
John Stillwell said:
William I can call you tomorrow and would be happy to email u the proposal.
I have been approached by two leasing agents, one representing Baker Exploration and the other representing Halcon.
I want to go with the winner, the one who plans to drill the well. The small acreage is located near FM2818 and Villa Maria intersection. Can someone give me some advice on who to lease with?
Don't know about Baker - 90% sure they are a brokerage firm.
Halcon has been chasing the Eagle Ford play very hard in Brazos Co and into Burleson. Have permitted over 40 wells in the Bryan /CS area and have drilled over 2 dozen. Very successful - appears to be the core for their operations right now. Look at their website for more info.
Halcon are the old Petrohawk guys that first "discovered" the Eagle Ford in S Tx in 2008-2009.
Pretty obvious who I would chose - even if Halcon offered less money for lease.
Bubba B Brown said:
I have been approached by two leasing agents, one representing Baker Exploration and the other representing Halcon.
I want to go with the winner, the one who plans to drill the well. The small acreage is located near FM2818 and Villa Maria intersection. Can someone give me some advice on who to lease with?
I highly recommend Halcon.
I originally leased to PetroMax Energy. Since I signed, PetroMax sold the lease to Halcon which I feel is to my best interest since Halcon has drilled more wells than any other company in Brazos County this year. I feel they ere the most reputable company operating and drilling in the Brazos Valley.
I also suggest that you do not settle for less than 25% royalties GROSS AT THE WELLHEAD. Also, the mineral royalties paid should be without deduction for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and otherwise making the oil, gas and other products produced hereunder ready for sale, or use. Also, make damn sure that your lease states that you get paid for not only oil and gas but also all condensate, distillate, or other liquid hydrocarbons.
Bonus money has been running between $800 and $1200 an acre.
Thanks
William Osborn {Bill}
I agree Przzz! Actually, year to date, Halcon has applied for 79 wells to be drilled and have drilled over 60 producing wells drilled this year just in Brazos County. And they are very concerned about the land owner and those who live in the vicinity of the wells. When they were fracing a well close to our home, the noise was pretty bad so they put us up in a hotel for 4 nights even though we did not have any interest in the well. They were only concerned about our peace and well being. AWESOME FOLKS TO DEAL WITH!
I highly recommend Halcon.
I originally leased to PetroMax Energy. Since I signed, PetroMax sold the lease to Halcon which I feel is to my best interest since Halcon has drilled more wells than any other company in Brazos County this year. I feel they ere the most reputable company operating and drilling in the Brazos Valley.
I also suggest that you do not settle for less than 25% royalties GROSS AT THE WELLHEAD. Also, the mineral royalties paid should be without deduction for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and otherwise making the oil, gas and other products produced hereunder ready for sale, or use. Also, make damn sure that your lease states that you get paid for not only oil and gas but also all condensate, distillate, or other liquid hydrocarbons.
Bonus money has been running between $800 and $1200 an acre.
Thanks
William Osborn {Bill}
Przzz said:
Don't know about Baker - 90% sure they are a brokerage firm.
Halcon has been chasing the Eagle Ford play very hard in Brazos Co and into Burleson. Have permitted over 40 wells in the Bryan /CS area and have drilled over 2 dozen. Very successful - appears to be the core for their operations right now. Look at their website for more info.
Halcon are the old Petrohawk guys that first "discovered" the Eagle Ford in S Tx in 2008-2009.
Pretty obvious who I would chose - even if Halcon offered less money for lease.
Bubba B Brown said:I have been approached by two leasing agents, one representing Baker Exploration and the other representing Halcon.
I want to go with the winner, the one who plans to drill the well. The small acreage is located near FM2818 and Villa Maria intersection. Can someone give me some advice on who to lease with?
Thanks for your timely and detailed response. I believe I have my answer.
William Osborn II said:
I highly recommend Halcon.
I originally leased to PetroMax Energy. Since I signed, PetroMax sold the lease to Halcon which I feel is to my best interest since Halcon has drilled more wells than any other company in Brazos County this year. I feel they ere the most reputable company operating and drilling in the Brazos Valley.I also suggest that you do not settle for less than 25% royalties GROSS AT THE WELLHEAD. Also, the mineral royalties paid should be without deduction for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and otherwise making the oil, gas and other products produced hereunder ready for sale, or use. Also, make damn sure that your lease states that you get paid for not only oil and gas but also all condensate, distillate, or other liquid hydrocarbons.Bonus money has been running between $800 and $1200 an acre.ThanksWilliam Osborn {Bill}
Thanks for your timely and detailed response. Sounds like good advice.
William Osborn II said:
I agree Przzz! Actually, year to date, Halcon has applied for 79 wells to be drilled and have drilled over 60 producing wells drilled this year just in Brazos County. And they are very concerned about the land owner and those who live in the vicinity of the wells. When they were fracing a well close to our home, the noise was pretty bad so they put us up in a hotel for 4 nights even though we did not have any interest in the well. They were only concerned about our peace and well being. AWESOME FOLKS TO DEAL WITH!
I highly recommend Halcon.
I originally leased to PetroMax Energy. Since I signed, PetroMax sold the lease to Halcon which I feel is to my best interest since Halcon has drilled more wells than any other company in Brazos County this year. I feel they ere the most reputable company operating and drilling in the Brazos Valley.I also suggest that you do not settle for less than 25% royalties GROSS AT THE WELLHEAD. Also, the mineral royalties paid should be without deduction for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and otherwise making the oil, gas and other products produced hereunder ready for sale, or use. Also, make damn sure that your lease states that you get paid for not only oil and gas but also all condensate, distillate, or other liquid hydrocarbons.Bonus money has been running between $800 and $1200 an acre.ThanksWilliam Osborn {Bill}
Przzz said:Don't know about Baker - 90% sure they are a brokerage firm.
Halcon has been chasing the Eagle Ford play very hard in Brazos Co and into Burleson. Have permitted over 40 wells in the Bryan /CS area and have drilled over 2 dozen. Very successful - appears to be the core for their operations right now. Look at their website for more info.
Halcon are the old Petrohawk guys that first "discovered" the Eagle Ford in S Tx in 2008-2009.
Pretty obvious who I would chose - even if Halcon offered less money for lease.
Bubba B Brown said:I have been approached by two leasing agents, one representing Baker Exploration and the other representing Halcon.
I want to go with the winner, the one who plans to drill the well. The small acreage is located near FM2818 and Villa Maria intersection. Can someone give me some advice on who to lease with?
Your welcome!
Thanks for your response and the information. I think I will go Halcon. Bubba
Bubba B Brown said:
Thanks for your timely and detailed response. Sounds like good advice.
William Osborn II said:I agree Przzz! Actually, year to date, Halcon has applied for 79 wells to be drilled and have drilled over 60 producing wells drilled this year just in Brazos County. And they are very concerned about the land owner and those who live in the vicinity of the wells. When they were fracing a well close to our home, the noise was pretty bad so they put us up in a hotel for 4 nights even though we did not have any interest in the well. They were only concerned about our peace and well being. AWESOME FOLKS TO DEAL WITH!
I highly recommend Halcon.
I originally leased to PetroMax Energy. Since I signed, PetroMax sold the lease to Halcon which I feel is to my best interest since Halcon has drilled more wells than any other company in Brazos County this year. I feel they ere the most reputable company operating and drilling in the Brazos Valley.I also suggest that you do not settle for less than 25% royalties GROSS AT THE WELLHEAD. Also, the mineral royalties paid should be without deduction for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and otherwise making the oil, gas and other products produced hereunder ready for sale, or use. Also, make damn sure that your lease states that you get paid for not only oil and gas but also all condensate, distillate, or other liquid hydrocarbons.Bonus money has been running between $800 and $1200 an acre.ThanksWilliam Osborn {Bill}
Przzz said:Don't know about Baker - 90% sure they are a brokerage firm.
Halcon has been chasing the Eagle Ford play very hard in Brazos Co and into Burleson. Have permitted over 40 wells in the Bryan /CS area and have drilled over 2 dozen. Very successful - appears to be the core for their operations right now. Look at their website for more info.
Halcon are the old Petrohawk guys that first "discovered" the Eagle Ford in S Tx in 2008-2009.
Pretty obvious who I would chose - even if Halcon offered less money for lease.
Bubba B Brown said:I have been approached by two leasing agents, one representing Baker Exploration and the other representing Halcon.
I want to go with the winner, the one who plans to drill the well. The small acreage is located near FM2818 and Villa Maria intersection. Can someone give me some advice on who to lease with?
If you would like, when you think you have a decent offer and lease, I would be more than happy and read it just to make sure there are no red flags! just let me know. I will send you a friend invite so that we can share contact information. I just want to make sure land & mineral right owners get a fair shake.
Good Luck,
Bill
Bubba B Brown said:
Thanks for your timely and detailed response. Sounds like good advice.
William Osborn II said:I agree Przzz! Actually, year to date, Halcon has applied for 79 wells to be drilled and have drilled over 60 producing wells drilled this year just in Brazos County. And they are very concerned about the land owner and those who live in the vicinity of the wells. When they were fracing a well close to our home, the noise was pretty bad so they put us up in a hotel for 4 nights even though we did not have any interest in the well. They were only concerned about our peace and well being. AWESOME FOLKS TO DEAL WITH!
I highly recommend Halcon.
I originally leased to PetroMax Energy. Since I signed, PetroMax sold the lease to Halcon which I feel is to my best interest since Halcon has drilled more wells than any other company in Brazos County this year. I feel they ere the most reputable company operating and drilling in the Brazos Valley.I also suggest that you do not settle for less than 25% royalties GROSS AT THE WELLHEAD. Also, the mineral royalties paid should be without deduction for the cost of producing, gathering, storing, separating, treating, dehydrating, compressing, processing, transporting, and otherwise making the oil, gas and other products produced hereunder ready for sale, or use. Also, make damn sure that your lease states that you get paid for not only oil and gas but also all condensate, distillate, or other liquid hydrocarbons.Bonus money has been running between $800 and $1200 an acre.ThanksWilliam Osborn {Bill}
Przzz said:Don't know about Baker - 90% sure they are a brokerage firm.
Halcon has been chasing the Eagle Ford play very hard in Brazos Co and into Burleson. Have permitted over 40 wells in the Bryan /CS area and have drilled over 2 dozen. Very successful - appears to be the core for their operations right now. Look at their website for more info.
Halcon are the old Petrohawk guys that first "discovered" the Eagle Ford in S Tx in 2008-2009.
Pretty obvious who I would chose - even if Halcon offered less money for lease.
Bubba B Brown said:I have been approached by two leasing agents, one representing Baker Exploration and the other representing Halcon.
I want to go with the winner, the one who plans to drill the well. The small acreage is located near FM2818 and Villa Maria intersection. Can someone give me some advice on who to lease with?
William, I respect your opinions as stated and believe too that Halcon is a good company with an excellent reputation. Yet they are not the only player in the EagleFord Shale. Your recommendation to lease to Halcon may not be in everybody’s best interest. As in life… not all situations are equal.
I know of Baker Exploration Company and believe a “smaller” company has many attributes to add to a merging development play such as Brazos County. First, Baker Exploration has been drilling and participating in wells in Brazos County since 1980 having participated and/or operated in over 100 wells in Brazos County alone. Baker Exploration has maintained an operating office here in Brazos County since 1985 which has recently been moved over to Burleson County. While operating over 40 wells in Brazos County alone in a period from 1990 to 1995, located mainly in the Steephollow and within the BCS city limits, Baker Exploration maintained an excellent reputation with landowners and city officials.
Would it surprise you to know that Baker Exploration took many of the first oil and gas leases in this EagleFord play in Brazos County in 2011 and caused three wells to be drilled by Weber Energy in partnership with Baker Exploration. The group then sold out to Halcon in early 2013. The Baker Lessor’s are extremely pleased with Baker and Halcon at this time while they are receiving Division Orders for their property.
Another way to look at the leasing situation, that I feel you should point out to this blog, is the fact…”would you rather lease to a company with a huge acreage position (Halcon has a reported 300,000 acres) or would you rather lease with a company like Baker Exploration who has the focus to handle a small acreage position and attempt to get oil and gas development on their lease position as soon as practical”. The focus of a smaller Lessor may help to expedite the development of these properties, and whether you lease for a ¼ of 1/5th lease, we all know and understand the time value of money, even if you lease at the smaller 1/5 royalty.
Thanks for your comments on Baker's track record in the area. Unless I am mistaken, Baker's historical drilling as an operator has all been Austin Chalk or Buda - very different plays with respect to approach and needed capital than the present Eagle Ford play in this area. And neither of these are plays that require massive frac stimulation efforts to make the EF productive.
Land owners will make their own decisions, but personally I would look at the track record for drilling the Eagle Ford play to date - and Halcon (as well as others, e.g. Clayton Williams) have it.
It appears that Baker will have to bring in a third party to drill EF well - a big unknown for any landowner.
As always, just my opinion on this issue.
Shaun Penny said:
William, I respect your opinions as stated and believe too that Halcon is a good company with an excellent reputation. Yet they are not the only player in the EagleFord Shale. Your recommendation to lease to Halcon may not be in everybody’s best interest. As in life… not all situations are equal.
I know of Baker Exploration Company and believe a “smaller” company has many attributes to add to a merging development play such as Brazos County. First, Baker Exploration has been drilling and participating in wells in Brazos County since 1980 having participated and/or operated in over 100 wells in Brazos County alone. Baker Exploration has maintained an operating office here in Brazos County since 1985 which has recently been moved over to Burleson County. While operating over 40 wells in Brazos County alone in a period from 1990 to 1995, located mainly in the Steephollow and within the BCS city limits, Baker Exploration maintained an excellent reputation with landowners and city officials.
Would it surprise you to know that Baker Exploration took many of the first oil and gas leases in this EagleFord play in Brazos County in 2011 and caused three wells to be drilled by Weber Energy in partnership with Baker Exploration. The group then sold out to Halcon in early 2013. The Baker Lessor’s are extremely pleased with Baker and Halcon at this time while they are receiving Division Orders for their property.
Another way to look at the leasing situation, that I feel you should point out to this blog, is the fact…”would you rather lease to a company with a huge acreage position (Halcon has a reported 300,000 acres) or would you rather lease with a company like Baker Exploration who has the focus to handle a small acreage position and attempt to get oil and gas development on their lease position as soon as practical”. The focus of a smaller Lessor may help to expedite the development of these properties, and whether you lease for a ¼ of 1/5th lease, we all know and understand the time value of money, even if you lease at the smaller 1/5 royalty.