I represent several mineral owners in these above captioned lands and they have recently been approached with a 5 year lease offered by West Coast Land, $20 rental and 1/8 royalty. I believe this rental value to be quite low. I'm very curious though as to what information people may have as to the geological properties of these lands. Any idea if this is going to be a gas or oil well, both? Vertical well I imagine, but what spacing? Any historical production in San Luis Obispo County. Any and all information pertaining to oil and gas development in this part of the state would be much appreciated! Thanks, Andy
Andy -----
San Luis Obispo County does not have an extensive oil / gas producing history. That having been stated, which township and range are the sections located in? I know that a recent BLM oil and gas lease auction in December featured some lands in SLO County but I believe the acreage was had very cheap. A plat map is always helpful. Regards ----
Hi Andy:
Drake is correct about the history of SLO County oil production, but there are a few areas that have had production for a while. There are oil companies looking at the Monterey Shale in that area as well. You probably are aware that West Coast Land is taking the lease for an oil company and is only a broker. You have the right to know who the lease is being taken for (which oil company). I would find this out simply to know if you have a major oil company or some smaller one.
The rent is probably somewhat in the ballpark. Twenty dollars per net mineral acre is low for Kern County but is likely appropriate for SLO given the lack of production. A lease is a contact and therefore negotiable, however. You may wish to ask for $25. They may decline but a $5 bump won't offend them. As to the 1/8, I suggest seeking 1/6. This is fairly standard and again, they won't be offended that you asked even if they decline to accept it.
Good Luck!