Liz,
Congratulations on your new lease. Christmas came early this year.
Clint Liles
Thanks, Clint! Yes, definitely a wonderful Christmas present. And Jerry is absolutely correct - Wade waaaaay more than pays for himself.
Yes, we wondered if maybe that is what was going on. My SIL has equal rights in this acreage but her CWEI lease does not expire until August, like yours. She hasn’t been contacted yet.
Best luck with yours!
I received an offer of $1500 nma , 25% royalty in block C-8, section 26. Abstract 3323. Is this a competitive rate for this area at this time?
Hi all,
Still working on getting lease done with R&J Graham (on behalf of Apache) in Reeves, Sections 22 and 48. This is an area with little going on, little infrastructure, and yet Apache is making a big play here, buying up everything they can.
The landman I'm working with has a reasonable offer: $800/acre, 1/4 royalty, 3 years with renewal at same terms for years 4 and 5. The hitch is they want to combine both parcels into 1 lease, which to me seems to limit flexibility for us. By the way, this is a GLO lease; spoke with Drew Reid and he confirmed this is a reasonable number/acre for this area.
I am pushing back on the combined lease, though, and trying to get the full amount (for all 5 years) paid up front, or other concessions made. (Two other lessees were paid the full amount up front.) But, the landman is pushing back hard, saying the deal will be rescinded if we don't accept by "Monday, January 5" (so, in reality, either Monday the 4th, or Tuesday the 5th).
Anyway, wondering if anyone sees an issue with lumping 2 parcels into one lease? Am I making a mountain out of a molehill here? Should I keep pushing for concessions - and risk losing the deal - or just accept what seems to be a solid offer in an area with no one else and in a market that is tough at best?
Thanks for any thoughts!
Jake -- I assume SECs 22 & 48 are located in BLK 13 H&GN survey, southern Reevess? Thanks -- Later -- Buzz
Hi Buzz,
The parcels are both Block 56, T&P, T7, with Abstract 3291 for 48, and 3741 for 22.
Thanks!
Jake,
Just my 2 cents. I think asking for the full amount for 5 years is unusual and not a good idea, since demand for oil is slowly rising. Not sure if supply will change though. My recommendation is to talk to Wade Caldwell, a great oil and gas lease lawyer who contributes to this blog. He was honest and " up front" with us in renewing our lease recently in Reeves Blk C-18, Sec 4.
Happy New Year.
Fred
Jake -- since you asked the question on the lease(s), I second Fred's recommendation to seek the advice of an O&G attorney familiar with the area. In addition to bonus, royalty and term, there are many lease term considerations to avoid/include! I can vouch that Mr. Caldwell certainly merits consideration. Later -- Buzz
Jake, I agree with Fred and Buzz. If you are talking more than just one or two acres, I'd definitely talk to Wade. We just worked with him to finalize a lease in another area of Reeves. Our area was hotter than yours but not the hottest. Anyway, we were very, very happy with Wade's work. He didn't just get us more money - he got us a much better lease than we already had.
That said, your area isn't very active right now. We have acreage about 5 miles to the ENE of yours and we haven't had any offers. What they are offering you isn't great and could have big ramifications for you down the line. But only you know just how much you need the money right now.
Thanks, all, for the helpful input. I will reach out to Wade as well. We've been working with an attorney already on other deals, but sounds like Wade would be very helpful on this deal.
Thanks much, and Happy New Year!
Jake - I'm aboard the "Wade Caldwell train" too. Happy to see you're reaching out to him. Wade recently obtained a lease for us in September of which we are quite pleased with. Good luck Jake.
Changing the subject somewhat...I have three tracts expiring September-October. I am interested in what is going to happen with them. They are all in good position to have good production, based on nearby results. I just wonder if Energen is going to drill the two NW of Pecos, attempt to release, or drop the acreage. The other is well south of Pecos and the recent whisper has been that Clayton Williams may be talking with COG, just to our east.
Interesting times...if nothing else!
Cove Resources, LLC contacted me with $3500/acre 25RI for ANY SECTION in Block 13. Letter stated that Cove is leasing for a very experienced operator in Reeves County. Contact is T C Smith 1-325-665-1987
Just wanted to post this info for other mineral owners too.
Thanks for passing on the info. As your negotiations progress, would you let us know how they are to work with? TIA!
Have a great New Year!
Fred, I have minerals in sec 21, Blk C-17 which is the section adjacent to your sec 4, Blk C-18. My lease on section 21 is terminating soon, so I would be interested in what terms you got for the lease renewal on sec 4. Donny
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Cove Resources, LLC contacted me with offer of $3500/acre 25RI for ANY SECTION in Block 13 on 1/2/2016. Letter stated that Cove is leasing for a very experienced operator in Reeves County. Contact is T C Smith 1-325-665-1987
Thought you might want to contact them.
Want to pass on information to anyone leasing. Just completed a lease with Primexx for $2500 per nma, 25% for 3 years in Block 13, Sections 108 and 137. Very grateful to Wade Caldwell who negotiated the lease price and language. I highly recommend Mr. Caldwell and suggest that if you are looking to lease that you consider the big picture. The bonus money, while important, is only part of your negotiation. For the long term, the lease language serves to protect you and your fellow mineral owners if a well is drilled. Also, consider contacting fellow mineral owners in your section and form a group to negotiate with more acreage and thus more leverage.
Georgia Jones
Congratulations, Georgia!
Do you mind sharing how many acres you leased ... and was it all in one tract? Thanks!
The mineral owners created a group, represented by Mr. Caldwell, that included virtually all of the 1280 acres in sections 108 and 137.