Property located at: Section 18, T29, R29, Kern County
We have an oil lease agreement every 3 years with West Coast Land Services. We are on our 2nd oil lease and it has been 4 years this July. We have 2 more years before we have to figure out if we wish to sign on for another 3 years. I do not see any obstacles holding up the company from drilling. California has strict regulations/laws, but how long should we give an company to drill? Should we sign another lease in 2 years for another 3 years? I would appreciate feed back from anyone who has an approximate number of years it usually takes to drill. I realize there are factors that might slow the process, but this land doesn't have any of those obstacles. I have been told it usually takes 3-5 years, is that correct?
My mother had a 20 year lease back in the 50's and 60's and there was no drilling. Then I just signed a 5 year lease last year. There are so many regulations in California it is hard to say if or when they will drill. May not be in my lifetime.
It partly depends on how large and/or contiguous your property is. If it is one large (at least one section, probably four or five) block, an operator ought to be able to put a bit in the ground within three years, even in California. If the operator has to assemble a block of land with neighbors, small undivided interests, etc. it could take more time. In any event I would never go beyond five years for a primary term; and make sure you are guaranteed to be paid for all five years, either up front or seriatim. You can always negotiate new terms (and often better ones) at the end of the primary term.
West Coast is not an operator, but an agent. They may be working for an oil company or for someone who is trying to assemble a group (either oil companies or investors) to initiate a drilling program. Sometimes these things, work out, sometimes not. As long as you get paid, and your property is not tied up for too long, you still make out OK.
The total property size is 77.5 acres.