Marquez area drilling

Texas Mineral Rights Leon County, TX
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Reference Leon County Texas.

I have mineral rights in Abstract 76, Red Ranch Gas 2 unit, bought last year from XTO by Hilcorp.

I purchased these mineral rights about 2 years ago. Frankly, I’m rather ignorant about mineral rights, the inside/outs of what seems to be a very complex subject. I’m on a steep learning curve.

My understanding, there’s huge gas deposits running from Franklin, through Leon County, and beyond, within 3 miles either side of US 79.

Wells are being dug to about 20,000 feet for extraction. Also, a 36- inch pipeline being laid in, as numerous smaller pipelines. Apparently, Comstock is the most active company for now.

I’ve have just started getting offers to buy. The existing permit allows drilling to 100 feet below the deepest, existing well. All indications are that I can obtain a permit to go to 20,000 feet. Potential prospects

Questions:

Any knowledge of Hilcorp intentions to drill? I can’t imagine they would purchase these from XTO and not drill.

How is a permit obtained to drill deeper? Is this Hilcorp’s responsibility, or must I initiate action?

Is it wiser to obtain a permit for deeper than 20,000 feet, with the idea it may be needed for this particular area, and/or future , deeper drilling?? Obviously, Hilcorp has the geologic surveys and assessments.

How are royalty payments determined? Are payments spread to all mineral rights owners within an abstract, or to holder of a specific ownership area within the abstract where an actual well exists?

Any areas to gather information, such as, “Mineral Rights for Dummies”?

Thanks.

2

Suggest that you get very familiar with the Texas Railroad Commission website. You can find permits there. Permits are filed by operators. Mineral owners generally do not initiate action unless they have the financial backing to do so. Various operators are active in the area. The map below outlines Abstract 76. There are several permits just to the S and E of you by Comstock. There is a rig on the one in A-948

Royalties are determined by what type of spacing and allocation allowed. An equation that accounts for net acres, spacing acres, royalty and feet perforated. The spacing may extend outside the abstract. Operators attempt to lease with all mineral owners within the spacing of the well.

You might consider joining the National Association of Royalty Owners. They have a very active Texas Chapter. NARO has chapters across the country in active oil and gas areas. They have classes on mineral ownership, webinars, conventions, etc. www.naro-us.org

A very helpful book is called Money in the Ground by John Orban. Very good reference for those in the oil patch.

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Thank you for the response. You provided very helpful information.

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Hi there,

Just saw your response and I’m familiar with the Railroad site but wondering how you can tell there is a well on a site (like A-948)?

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Welcome to the forum.

On the GIS map, you can search by county See the gray box in the upper left. Then by survey. abstract, block or section (see the dropdown box under the magnifying glass). The permitted locations have an open circle.

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Hi Martha - do you know much about the easement lease process? I have my initial offer for the Pinnacle Gas Treating line. I’ve read everything I can find on how to negotiate but I can’t find anything about where the rate should be, justification for why I should hire an attorney or who else is impacted by the line. Any insight would be appreciated.

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Anything to do with an easement should go through an attorney in my opinion. You are potentially tying up your acreage for decades and maybe generations, so you need legal eyes on the terms of the contract, whether you are losing your land to a “taking” or not, what the methodology of digging an replacing the dirt, the bonus and royalty timing etc. There are TX attorneys listed in the Directories tab above or you can contact a surface specialist by looking on the bar association.