Is 4000k per mineral acre a good offer with 1/5 royalty. I inherited about 1 mineral acre out of about 260 total on block c-24 section 20 and section 16
Probably not. I don’t see any direct development in Section 16, Block C-24 but there is activity all around. Section 20 has several wells that have been producing since 2015. Shockwave since December 2019 and Pistol 24-20 since December 2015. If you own minerals in Section 20, Block C-24 then you are owed some money. Since Sections 16 and 20 are not contiguous, so a more precise description of you minerals will be needed to help you with any lease questions. I would not sign a lease without first determining the exact nature of the minerals you own and then, unless you are experienced, getting assistance from someone someone familiar with oil & gas. When and if you do lease, I would suggest asking for 25% royalty and start at $9,000/acre bonus. There are plenty of people in this forum that are far more knowledgeable than myself and would be willing to assist you and/or getting you to the right person.
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So the exact location from the original deed is NW quarter and the NE quarter of the SW quarter or section 20 block c-24 and the South Half of the Northwest quarter of Section 16 block c-24. A land attorney had contacted myself in Jan 2021 about the inheritance but had been searching for me for about a yearr prior to that. Then Friday i was contacted by a landman for ConocoPhillips with this offer. I am absolutely clueless to any of this. My sister also received the same offer as the inherited 4 net acres were split between 4 of us. She plans on accepting as she wants the money sooner then later. I on the other hand am not.
You definitely have production in Section 20. Is the lease you were offered for both Section 20 and Section 16? Since you have so few acres, it might be worth having a professional negotiate the lease for you. You could make a little money for a long time if you had a good lease. If you and your siblings all worked together (e.g. identical leases), you could split the fee and come out way ahead. I urge you to NOT sign the lease you received in the mail without having it reviewed by a professional. Where do you live?
I am in Rochester, NY. The lease was just for section 20.
I would tell your sister not to lease for those terms! She should be able to do better.
Agree with Texas Tea. Even if you have only 1/2 acre in Section 20, the royalties since first production (December 2019) would be a nice sum. I can’t emphasize enough for you and you (and the other 3) to hire a professional (familiar with TX Oil & Gas) to assist you with the lease. You can all do better than their offer and get a better lease than the one you were sent to sign. Good luck.
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Absolutely do not sign a 1/5th lease in the Permian. Royalties should be 1/4. Never sign for less than that. Don’t fall for the ‘we can increase the bonus if you sign a lease under 25%’ baloney if they try that route. 1/4 royalty or hang up the phone on them.
$4k per acre for bonus amount is not bad. They can do $6k easy though in that area.
I also agree. My cousins, siblings and I split the cost of an oil lawyer to negotiate our lease and royalties. Split several ways, it wasn’t much at all. We got 1/4 royalty. I don’t remember what it was for the lease and back payments for royalties in suspense. Got very good advice from this listserv! There are lots of shysters out there counting on the fact you are naive about what things are worth.
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