Greeting, we have property in Grapeland TX, Houston County and was approached by Drake Exploration in leasing our mineral interest. No.31, John Edens No.1191 Abraham Zubar No.1366 TH Barrow No.1366 TH Barrow Approx 85 acres. Does anyone know what the signed Bonus payment rate and Royalty is going for in our area. We were offered 350.00 per Mineral Acre and 18.75% Royalty. Any help would be much appreciated.
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A 3/16ths royalty is pretty fair. You might insist on a little more money regarding the lease bonus and a cost free clause. Maybe just take the $350 and put in depth clause provisions. Depends on what zones they are targeting, did they happen to say?
I think it can vary quite a bit. Some places in Houston County are very good, other spots not good at all. It can also depend on how much (how high ownership %) you own. I’m down in Lovelady, we have requested and received $500 per NMA and 20%. But I am a very tiny owner, I believe larger owners have gotten more. I also own near Shady Grove property where nothing has happened or is happening!! I was offered $350 per NMA I ask for $500 and never heard from them again! I recommend you check the Texas Railroad Commission map for drilling activity around your property. You may get a sense for how good the area is as well as dates when permits and drilling were done. Good luck!
Thank You for your help. Can you please educate me on what a depth clause provsion is?
And no they did not mention the zone
Only lease them the depths they are targeting. That way if another company identifies a different depth zone at some point in the future you can then lease that zone and get paid again. It’s possible to have multiple depths(zones) being operated by different Operators. In my opinion it’s more valuable to have a cost free royalty clause in the lease instead of a couple hundred bucks more per acre for the lease bonus. Cost free means you get your portion at the well. You do not get deducted for. Treating, transporting or storage and other associated fees
Thank You for your help again. I appreciate you and your knowledge on all of this.
Where are you located? We have also been contacted by Drake and would like to talk to someone in the area.
No problem, I grew up in Athens and I’ll try to help my neighbors out when I can.
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N Grapeland, CR 2265
MinerialOwner
Higher in this chain of comments Garry_Smith suggested you check the Railroad Commission’s map for activity in your area. Great suggestion.
In case you aren’t familiar with RRC’s site, below is what their map currently shows. The three surveys you posted abstract numbers for are outlined in red.
I’m guessing the reason behind the lease offer you got from Drake relates to the permit location I circled in blue.
Here’s a link to a recent post discussing a very deep wildcat well currently being drilled in that location about 3 miles south of you. https://www.mineralrightsforum.com/t/bobby-yancey-well-1-stealth-test-well-for-comstock/77593
Based on the information in Alan’s post I being slow on committing to a lease and having the advice of an oil & gas attorney familiar with that area before signing anything.
Drake, and possible others, may have made offers to a lot of folks in your area. I’d try to talk to landowners around you, starting with the larger tracts, and see if they are willing to share information on offers they’ve received and might be interested in negotiating as a group. The more acreage you can put together the more negotiating leverage you’ll have.
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Mineral Owner Did they have a no cost royalty clause?
Not that I could find. That is something you would have to negotiate.
Thanks. We are working on that.
Just my opinion; but, every location is different and most landmen are as well. IMO, what’s in the lease is considerably more important, no matter what the royalty or bonus money value winds up being. No lease should ever be signed without the help of a seasoned attorney that has at least some oil lease history. With all that said, anything less than 20% and anything less than $500/acre for the first three years went out prior to the last big leading frenzy around 2012-2014.
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