Rayborn, the 15% royalty is very unacceptable. Also, do not accept 18%. Ask for 20% royalty and $300 per acre bonus monies. The $300 would be negotiable. To the East of your A-89 is a Horizontal gas well(API 181-31391) drilled by Chesapeake Operating and completed in Feb. 2005/Production started in June 2006/producing from the Viola formation.
Also make sure you include a NO DEDUCTIONS CLAUSE in your lease.
Link to production data on well 31391:
http://webapps2.rrc.state.tx.us/EWA/specificLeaseQueryAction.do?tab=init&viewType=prodAndTotalDisp&methodToCall=fromGisViewer&pdqSearchArgs.paramValue=|2=05|3=2016|4=04|5=2017|103=227196|6=G|102=09|8=specificLease|204=district|9=dispDetails|10=0
THE BEGINNING DATE ON THIS FORM CAN BE MANIPULATED BACK TO JUNE 2016
There are numerous dry holes, plugged oil wells, producing oil wells and producing gas wells in the areas to the East, Southeast, South and Southwest.
Production from these wells is coming from the Viola and Baker Sand Formations.
GIS Map of Grayson County A-83/89/566 and surrounding area:
CLICK ON MAP TO ENLARGE
Clint Liles
A-525
Well 30592 in A-525 is a plugged gas well/Atoka Formation/completed in 1978
Well 30140 is a temp. abandoned gas well/Atoka Formation/Holden Energy Corp.
GIS Map of Grayson County A-525
CLICK ON MAP TO ENLARGE
Clint Liles
Leasing agent says there is no ongoing leasing activity in Grayson County, i.e., no competition, and won't sweeten the offer very much even though there is production to the east and to the south. Deciding whether to pass or accept his offer.
I say again do not accept 15% royalty. 20% royalty is acceptable. Negotiate down if you have to to $200 per acre on bonus and 3 years plus 2 year. The long term money for you is in the royalty. I would keep my minerals in the ground rather than giving them away.
15% royalty in today's market is an insult.. NO WAY. PERIOD.
Clint Liles
