We own in Section 25, Block C-17. We have been offered $4,500/nma with 25% royalty.
Anbody else in that area or know of going rates?
Also interested in learning more about selling or what a good offer might consist of.
Hey John - My family has acreage about 9 miles south of you and we got twice what you are being offered. That is mostly because I was able to get more than one company competing to get the lease. If you need any help let me know.
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Does anyone know what terms are being offered for home lots in the City of Pecos right now? I only have experience with more rural acreage. Thanks
We own 4.4444 net acres in Section 12, Block 57, Township 2, A-4924 in Reeves County. It is Mineral-Classified Land in which we own the surface and the state owns the minerals, but we are allowed 1/2 bonus and 1/2 royalties. We leased back in July 2013 to BHP Billiton and they drilled a horizontal gas well (State LRP 57-T2-12 1H) in late 2015 that has done well. We always get a lot of offers for this property but recently have gotten offered as much as $72,000 which is approximately a multiple of 27 years of our average cash flow from this well. This seems extraordinarily high and was wondering if anyone has any insight as to why so much would be offered for this small acreage. Are there multiple zones here or are these buyers just crazy??
Justin Pinkston;Reeves County Section 12/Block 57T2/A-4924
Justin, the gas well(389-34787) BHP Billiton drilled into Section 12 is a very good gas well with many barrels of condensate. It is producing from the Wolfcamp formation. There are numerous formations in this area that are possible of oil and gas production. This list will show the other formations that were encountered while drilling this well and other formations below the Wolfcamp.
CLICK ON DOCUMENT TO ENLARGE
Link to Completion Report for well 389-34787:
http://webapps.rrc.texas.gov/CMPL/viewPdfReportFormAction.do?method...
Link to Production Data on well 389-34787 1H/Lease # 278910:
Clint Liles
Travis -- $9000 per nma -- wow! Was that for a standard 3-yr lease with a 25% royalty?
Leases in the city of Pecos seem to be in the $2000-3000 range for those terms.
Hi Travis. Do you mind telling where your property is? We’ve got property that sounds not far from you. We’re in block 55 twp 7. That $9000 bonus per nma is fantastic!
Yes it was a 3 year lease with 25%. I had to work competitors really hard against each other to get it. Thanks for the info about the City of Pecos. That’s what I imagined it to be since the cost to work it is so much higher.
Hey Travis -- that's great! Do you mind describing the particulars of where your property is located, number of acres? Thanks -- Later -- Buzz
Can others please share your recent experience with bonus lease rates? I knew rates had gone up a lot in the last few years, but $9,000 per nma is higher than I previously thought possible, even with good negotiating skills, unless the land was along the Pecos river.
Travis, 9 miles south of John’s land puts you around Blk 55, is that right?
To get $9,000 per nma did you directly contact operators, hire your own broker/landman, or respond to those offers in the mail looking to buy/lease your minerals?
To everyone, I’ve heard if you own more net mineral acres you can demand a higher price? Is that true? If so, how much acreage will demand a higher price? 50 nma? 100 nma? 200 nma? Or do you have to own multiple sections like, say, the King Ranch??
Thanks everyone!
Checking rates for 20 NMA in Sections 19 & 21, Block C17 leases. Have on the table $3000; 3 yrs; 1/4.
Thanks.
Hey Tom - I think $9k is very high indeed and I was leasing Sec 44 & 45 Blk 72. Very fringey by most standards. I happen to be in the business and contacted operators directly and was able to leverage other owners in the same tracts as well. More acreage is always better leverage so if you own more or can find owners to stand together at the negotiating table you will always do better. On that lease I was representing about 75 nma. Honestly, I think I got lucky with that negotiation. I have property a little further south, Sec 44 Blk 55 that is only getting offered $1k/nma.
Tim - I don't have specific knowledge of rates in your area but I am told that area is a little more faulted than further south so may not get quite as good of rates but I bet if you are being offered $3k you could get $5k.
Tim, I control 5 NMA Sec 21 Block C17. I’ve had 5 offers and the best was 2,750 3 yr 1/4. I did not try to negotiate for more money. I did try to get lease terms (the fine print) changed and was unsuccessful. So now I’m trying to sell the interest.
Section 293, Block 13 H&GN , Reeves County, Texas. Small NMA I control. What is the going rate here? On the table, $2500/per acre; 3 years; 1/4th.
I received an unsolicited offer to purchase my surface, mineral/royalty interests in Reeves Co. at Section 48, Block 51, Twp 7 (Hightower State Unit 1H). The total acreage is 640 and my interest equals 17.78 acres. The offer was approximately $2,800 per acre, which seems to be low-ball to me. I have 2 siblings that have the equal , individual interests and we all might be willing to sell if the price is fair. Contact me if you can assist in this. Thanks 2965-IMG_0047.JPG (105 KB)
David - it would be difficult to determine what constitutes a fair offer but the offer you have certainly seems very low. There was a new well permitted on that property in March and the area is starting to heat up for development which is good for value. Also good for you as an owner as you should see royalty benefits from it. In Reeves Co. offers to purchase minerals are all over the place but if you were to sell to me I would easily pay $10,000 per acre. There may be people who could or would pay higher for that area but at that rate I would feel like I was making a good investment.
just sayin
Thanks so much for your time and expertise Clint! Very helpful!