New lease

Texas Mineral Rights Madison County, TX
1

A friend of mine just got a lease between Madison and Midway.

$300 net mineral acre

3/16 Royalty

and 3 year primary term/2 year option @ $200 per net mineral acres.

Is this a good deal? He has small acreage.

Thanks for the help,

SIlver

2

Hello,

Leases were 500. per acre, and 20 - 25% royalty interest. Now they are 300 per acre, and 20%. I try stay away from the delay rental. If they want to lease you again in 3 years, let them pay the current price..... then.

Is it an oil company or a land lease"grabber" who will sell you to an oil company? What are the neighbors being offered?

WCM

3

Thanks WCM,

I will find out about the lease "grabber". I am not sure what the neighbors are being offered? I will try and find out.

Thanks,

SIlver

4

Hello,

Get me the lease company name, and I will see what I can find out. In todays oil market, any lease is a good offer. If you can, drive by their office, and see how large or small it is. Do they have a web sight? Learn what you can. And when things get better, and oil is at a good price, you want to be glad you got the best terms possible.

wcm

5

WCM

Here is the companies involved and websites:

Eiche, Mapes and Company - http://www.eichemapes.com/

burk royalty co. - http://www.burkroyalty.com/

Thanks,

Silver

6

Hello,

Eiche, Mape and Co are a land lease group that does work for oil companies. Burk Royalty has permitted lots of wells east of Madisonville Texas. If you drive through the area, they should have signs on gates where the have drilled. You might stop and talk to land owners in the area, and see what the neighbors signed for in lease agreements, and what they think about the company.

If this is the first offer, see if they would increase the numbers if you sign soon. ask if they would consider 400, per acre, and 1/4? How large is the tract?

wcm

7

Also,

The price per acre is nice "front money", but we all hope they drill the biggest well in the county and include us. The trick is to get the best price, and best terms, without scaring them away. Everything, on and in the lease, is open for discussion. ......EVERYTHING......

If they will do 350 or 375 per acre, and 20%, for 3 years I would sign it.

wcm

8

WCM,

Thanks for the info. We will see what we can do!

Silver

9

All told seems to be a tad on the light side, but you didn't say how many acres are involved. That always helps drive price upward with larger tract. However with prices where they are it's not too back. Always seemed acreage in that part of Madison County tend to be more gassy than Western part of the County.

10

Hello,

In the current oil market, many oil companies are not leasing at all. Things may stay the same for a few years. Just be sure that you have good terms, if they hold you, and drill your acres just before you expire.

Yes, you could get 500 per acre and 25 percent last summer. Not today.

wcm