We have 70 acres in Freestone County, Texas (Fairfield, Texas) and have been offered $400 an acre for mineral rights. Terms 3 years (3 year option at $600 per acre) and 20% royalty, does this sound fair.
Thanks,
V
who and what survey in Freestone county
You are stating terms for an Oil and Gas Lease, but you mention the offer was for mineral rights. Make sure you understand the difference. Research the property on the TX RRC website for activity. Patience and research generally provides a better financial decision.
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Redmond Fearing Survey, A-230.
But also states this “, A-230, in conflict with the J. Y. Aguilera Survey, A-2, Freestone County”. I have no idea what is meant by conflict???
The written statement is , “ Per our conversation today we represent XXXXXXXX and they are interested in leasing your families’ mineral rights in Freestone County, Texas in the tract of land listed below:
I will deal with a broker, but they must disclose the client. Patience and research will be required for the best result. If you have some confusion on their communication, contact them for a clarification.
It all depends upon your location about the value of a lease and WHOM you are dealing with. Comstock is the main company in Freestone County. Who is the company trying to lease from you? $400 seems real low. Depending upon your location I would say $1,000/net Min. Acre. for a 3 year lease and a 1/4 royalty.
I’m sorry, I called myself respecting the guy who contacted me by inserting XXXX"s (new to this forum) but the name of the company the guy says he is representing is “Vanna Production II, LP”
Vanna Production, working with Sabana Royalty Partners, previously leased and sold a 46,500 net acre position in Leon and Freestone Counties to Mitsui E&P. Mitsui has permitted a horizontal well in Freestone County, but nothing has been drilled yet. Vanna is also known to be leasing in the Tennessee Colony area in Anderson County.
It is likely that Vanna is leasing on behalf of Mitsui, but I’m not certain about that. You should be able to get a better deal than $400/$600/20%.
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Not a good offer based on terms - I don’t have any idea what if any production is planned for that area. But, offer seems low and 3 yrs is ok but no option for 3 yrs is good for you. 3 yrs. no extension or option and 25% royalties. ALSO, very important - I have always negotiated a BONUS upfront. Usually 4K - 10K depending on its location. This offer is a low ball and sounds like they are fishing for ignorance. IMO
Wow, thank you. With very little to go on with the exception of what has been shared here, I was able to get the per acre increase to $500 per acre. Additionally, the tract had originally been listed at 70.5 acres, but not sure how it was listed as 64 acres when sold and recorded on a 2001 transaction when the property was sold. Company agreed to pay the $500 for the extra 6 acres ($3,000). I’m still researching (James) but extremely appreciative of the input I’m receiving via this forum. God Bless all of you and thank you all for all input provided now and anymore to come before any paperwork is signed.
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Is this to buy your minerals? Or are you leasing?
We are holding on to rights and leasing.
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