Barron’s Article: Two Top Picks for a Delaware Basin Play
http://online.barrons.com/article/SB5000142405274870372800457810302…
~~ Later – Buzz
A pretty hot area, right now. You might want to go through these threads to see what other bonus amounts are mentioned, but keep in mind those are mostly new leases with a 3-5 year primary term.
Has anyone heard of a landman named Matthew Chalfant or the company MGM Oil & Gas? They have offered $500/acre for 3 years. I am thinking this is very low. Any information would be appreciated!
Scotsy – describe the location? Later – Buzz
Buzz-it is in Section 14, Block C-5, PSL Survey
Scotsy, I agree with Buzz, 25% royalty is norm for Reeves, signing bonus should be higher than $500/acre. But focus on the royalty, if each section has 100+ million barrels of oil then your bonus check is the least of your concerns, the real prize is the royalty. Sarah
Thanks Sarah, and I agree.
Fred
Scotsy – not in my immediate area of interest but $500/ac seems low to me going on recent activity in southeastern Reeves. Do negotiate for 25% royalty… getting to be the norm it seems. See John w nicholson comment below. Hope this helps. Later – Buzz
Fred – C-18 is real roughly 10 miles W of Pecos. Petrohawk is currently drilling 3 wells generally in your direction:
7 miles W of Pecos; 12 miles SW of Pecos and 10.6 miles W of Pecos.
Drilling activity-wise, their intense area of interest seems to be 6-7-8-9 miles NW of Pecos. Hope this helps… Later – Buzz
We had similar problem getting production data via the TX RR Comm GIS system. Sent them an email and they said to use path described in an earlier comment below using ‘Pending’…They said Pending usually turns out to be ‘official’. The RRC permit number is usually the lease number that you find when you go to the GIS map and lookup production data. Most of the current numbers start with 7, six digits…good luck.
this is the url they gave me…and it works for me…
http://webapps.rrc.state.tx.us/PR/publicQueriesMainAction.do
Fred,
we’re (owners) charged about 4.6% in taxes…I need to find out what kind of taxes to see what’s deductible. If anyone out there knows, please let us know.
Hi Firegirl, Our family rule is to never sell minerals…someone wanting to buy means someone expects some value in the future. I posted a link awhile back about the oil in place in Reeves county…it’s phenomenal. At the NARO national convention in Dallas earlier this month Allen Gilmer of DrillingInfo said the land held 100 million barrels per section and current technology allows them to get 20 million barrels per section. So here’s some math…at 25% royalty each acre has a recoverable amount of oil worth $500,000/acre to the mineral owner. The catch, someone has to drill and recovery will take years. But that’s a future earning potential someone would like to buy from you or anyone else in Reeves. If you just wait, someday someone will probably get to it. Guess it comes down to what you can hold in your hand now versus what you (or your descendants) are going to wait for. Sarah
I am so excited to read all the post here today. I thank you for the info William, Paul, Sarah, Firegirl, Kreg, Fred and R.W… Never could figure out exactly how much my land was worth. Now thanks to all you people I have a better idea of why I have been waiting all these years too. Louise
Thanks Buzz,
Nice to hear some good news. I have land West of Pecos in block C-18 and a lease by Kerr Drilling and Petrohawk. Maybe there will be some movement in the area next year.
Buzz, Sarah and others,
Ok, but since my acreage is Public School Land (PSL), I understand that I must share the royalties with the State of Texas?? Concerned ! Hopefully I am wrong.
Hi Fred, Yes, you must share with the state…but back in the early days of oil discovery in west Texas the state wanted to keep the entire royalty, after numerous court battles it was divided 50/50. So while you have to share, like all of us who own minerals in PSL areas, there was time when the state was going to keep it all so half is better than none. If I sound like sharing doesn’t bother me, it doesn’t. The money goes to education so I see the royalty owners and the students of Texas both benefitting. Sarah
Folks…a landman we know (we’ve worked with him for over 30 years)said that whatever deal they offer for the land and/or mineral rights multiply by 10, yes 10 and that’s a fair offer.
Got our Division Order last week from BHP at 0.11. We are 7 miles NW of Pecos 389-33372. Sure am glad we didnt take up those offers we had to buy the property (all offers were for $5k or less an acre). Don’t have the G5 yet so difficult to determine what this all means to us. Thanks Buzz for the BHP posts. Quite exciting!
Good news from down under Re: BHP Billiton/Petrohawk:
http://m.smh.com.au/business/looming-revaluations-to-cast-bhp-shale…
Especially so for those W and NW of Pecos. Later – Buzz
Scotsy – I don’t know your situation but, generally, I agree w/Sarah… i.e., try to deal with the one(s) most likely to drill a well… easier said than done. Later – Buzz