This year, for the first time in two generations, my land leased for $1500 an acre. Now the offers to buy the land are coming in. This doesn't indicate to me that it's a good time to sell. : )
Lori, approximately where is your property located, please? If it is already posted here, forgive me, but I didn't see it with a quick scan of posts.
Just like everyone else's, it's 14 miles NW of Pecos, but I don't think it's on the "right" side of the tracks ... lol.
A-3488, Blk 2, Sec 38, H&GN RR Survey. I only own 1/3 of the 40 acres. It looks like there's nothing around me but dry holes, plugged wells and some permits for horizontal wells within a 2-3 mile radius. The pipeline just missed us, too!
Story of my life. I sure wish my great-great-uncle had bought his nest egg about six miles to the north!
We talked about this last night (the whole "bird in the hand" thing) but I'm left with the knowledge that any decision has the potential to make me want to slit my wrists! The more I look at the GIS map, the more I think this lease was the most money I'll ever make as a West Texas oil baroness.
; )
Stephen Long said:
Lori, approximately where is your property located, please? If it is already posted here, forgive me, but I didn't see it with a quick scan of posts.
Lori, I would be very surprised if you don't have a productive well eventually on your lease. Activity all around you.
Most of the activity closest to me seems to be permitted to Energen. Anadarko has my mineral lease and the nearest new horizontal well permitted to them is a mile and a half away, but there's a new horizontal well permitted to Energen 1/2 mile away. How do royalties work with so many different companies drilling and holding leases in the same area? Surely Anadarko doesn't have to drill right smack dab on my 13 acres in order to collect royalties? If so, I'd say the odds are about the same as hitting the Lotto! : )
Your 13 acres will be a part of a pooled lease whereby you will receive a pro rata share of any production from a well drilled on that acreage.
Hang in there. I bet you will be pleased eventually.
I know I sound like an idiot, but I hope you'll humor me and tell me if I understand this correctly:
I believe that the dimensions of a pool are 1 sq mile surrounding a well. If that's the case, and if Acme Energy drills and completes a producing well and some of the land in the 640 acres surrounding the well is leased to Consolidated Fracking, then Acme has to pay Consolidated a portion of the revenue, which is then distributed to the lessors of Consolidated according to the percentage in the lease agreement?
On another thread you indicated that they would have to drill directly on a person's land in order for the person to get paid, but I'm supposing that multiple lessees in an area, horizontal drilling and pooling have changed that that scenario.
Thanks for the information!
PS: Out of pure curiosity I called the company looking to buy the land, just to see what they're offering. He said he'd work up a bid and get back to me, but he was talking about selling half the acres and retaining the other half so as to "play the odds" as it were. Honestly, the land was already divided three ways in my mother's will. If it gets divvied up any smaller there won't be room to have a picnic on it, much less a drilling rig! ; )
Typically your acres will be included in a bigger grouping of acres to form a large enough "unit" that can be drilled on. The landman representing the leasing company will be able to more accurately represent this to you, hopefully.
The basic "grouping of acres" is typically a Section of land (1 sq. mile=640 acres).
The description of the Section is the Legal Description and cannot be changed. It is not defined by the location of the well.
You may have a defined portion of that Section (i.e. 60 acres out of Section X and located [reference to Section corners and Section boundary lines] followed by a description of the boundary of the 60 ac).
You may have an undefined portion of that Section (i.e. an undivided 6/64 of Section X followed by the Legal Description of Section X).
The well location is defined by the Legal Description of the property it is on.
If you have an undivided portion then you are entitled to the benefits of the entire Section (generally speaking).
The Texas GLO oversees the leasing and drilling of all wells.
As Stephen said: Contact your Landman.