Larry: interesting thought that the company was trying to get ahead of the current lessee. Anadarko made their offer 4 months before the lease is set to expire so perhaps this is a factor. I will definitely counter and post what happens… Thanks for your input. Wade, thank you for your post. Good to hear that you think 500 sounds low. I will go through the lease and see if there’s anything I would like to change. I’m fairly new at this, so I don’t know what that might be, but it will be interesting to read the lease.
Dorothy,
If you inital lease is with Anadarko that would be good. We started dealing with Anadarko several years ago but they were slow to act an we found out they would lease land, tie it up and do nothing with it to prevent other companies from having the opportunity to lease. We ended up leasing to Cimarex Energy.
Anyone have information on KEW Drilling based out of Dallas, TX? They have interest in leasing mineral rights to some property my family owns in Ward County, but I do not know anything about this company. Little if no information can be found on the Internet. Any assistance in finding out who these folks are would be appreciated.
Does anyone have a mineral lease form they recommend? Maybe one that does not give all rights to the Lessee and protects the Lessor with things such as excluding operating costs out of royalty payments, etc.
Larry - I suggest getting proper legal representation to make sure your mineral lease is in your best interest. There are many pitfalls in the way royalties are determined and paid, environmental issues, force majeure issues, Pugh clause, gas rights and use, water issues, pooling, etc.
Check List for Negotiating an Oil Lease
I would not recommend using an off the shelf type of document to do the job for you. Unless you’re really familiar with how things work in these leases, you could end up getting a lot less money than you rightfully deserve. Just my $0.0000000000002 worth of opinion.
John,
Thanks for the information it is very helpful and eye opening. Lots of different things to consider.
Thanks Again.
Larry
Hello!
I have a land (E/2 SEC 15 TRACK K, BLK 1, W&NW ACRES: 43.890) in Ward County. But I don’t know how to approach and what I should. Please any advice. I appreciate your help.
Thanks a lot,
Jun
Jun,
I assume someone has approached you to lease the mineral rights to your land. If so, attached below are two files that provide some valuable insight on how to proceed with an oil / gas lease. I would suggest getting a lawyer who is familiar with oil/gas leases to protect yourself and get the most money you deserve from the lease. I would suggest to not go with any sort of lease document an oil company/operator sends you to sign since it will be highly skewed to benefit them and NOT you.
Also, unless you are familiar with how these oil companies / operators conduct business, there are many pitfalls in the way royalties are determined and paid, environmental issues, force majeure issues, Pugh clause, gas rights and use, water issues, pooling, production costs, taxes, etc.
Read both documents that are attached to get a better understanding on what you my encounter.
John A.
Jun,
Based on maps obtained from the Texas Railroad Commission, there does not seem to be many wells in your area. That doesn’t mean there isn’t any oil/gas. It just means nobody has drilled there yet. My suspicion is that oil companies are now looking for deeper oil/gas in the region instead of the shallow stuff that was sought during the 1950s - 1960s. For all we know, there may be someone knocking on your door in the not too distant future asking you about his land since there seems to be tons of activity in Ward County.
Also, a previous posting by Wade Caldwell gives a very good suggestion for posting your desire to lease your mineral rights. In fact, I should have looked at this before I got involved with an operator.
Good Luck!!!
John
John,
Thank you so much. It’s a very helpful and kind advice. I need to study a lot.
I do not have any offer yet. I don’t know my land area is active or not also. Yes, I’ll look for legal representation if someone contact me.
Thanks again,
Jun
p.s.> Anybody who knows how to contact with landman or the people concerned, please let me know. By the way, I’ll attach the location map and lot plan.
Jun-
There is a Listings section on the Home page where you can post these minerals for lease for free. May get you more eyes on it, rather than the Ward County page.
hello
In 2007, I obtained the territory in Texas. In the deed I signed on. there was no information about the mineral wells. The ex-ex-owner sold the land without including the mineral wells in the territory. This piece of information was just found recently.
Is it possible if we could find a court case where we could gain mineral rights?
If I am the owner of only the surface of the land, how can I make a deal with a gas company land lease?
To my knowledge, if a company wishes to drill mineral wells in my land then the surface owner must be contacted and must agree to a permit. Is there any more information on this subject?
Please let me know soon
Thank you
I am new to Ward County forum, but not new to oil and gas. I think KEW Drilling is ok. I negotiated a lease with them last year. We agreed to terms then they backed out citing other interests. We have the following available to lease - Black Survey, section 72, SF 8335, N1/2 of NW part, 80 acres and block 33, section 39.
Bill,
I can’t tell you the specifics of my negotiations with KEW Drilling since they are confidential as per my mineral rights lease agreement. I will say they are just putting together leases to flip to another operator. KEW Drilling doesn’t have an operators license with the Railroad Commission, so they can’t do any drilling/production. All they can to is obtain leases and resell. However, I will say they have been easy to work with.
One bit of advise. I would suggest getting a good oil/gas attorney to look the lease agreement over and make necessary changes. Don’t go with what they present to you initially since that agreement is highly skewed into their favor. If you do go with it, then you may very well end up in the sharing of production costs which you should not do. Consequently, you will probably end up getting must less in royalties. Also suggest getting your attorney to write a good indemnity provision to protect you against environmental and other legal issues that could come into play given current EPA mindset or those that may arise due to fracking.
Pay attention to the market where the price of oil and gas are determined. You’ll probably want the price dictated by a non-affiliate third party.
Suggest royalties paid by check and NOT by bank draft.
I suggest not paying any taxes and costs for treating oil prior to going to market.
Pay attention to pooling clauses and shut-in royalties in their lease agreement
As previously mentioned, KEW was pretty accommodating and went with most of what my attorney proposed for changes to the lease agreement.
Hope this helps a little.
John A.
John Weldon Brewster
I have had discussions with KEW Drilling for a location in Ward county. I’d like to talk to you about your experience. My tract is in Sec 72Blk34 H&TC Ry Co. Survey.
I’d like to friend you or vice versa.
Thanks.,
Bill Dwyer
I have some property in Ward County that I am interested in leasing. The property is located at
Block 34, H&TC RR Co. Survey Section 213: SE 30.000 acres of E/4N/4. How can I contact a Landman for this area?
If I am in a partnership, can I receive my royalty payments from Cimarex instead of the managing partner? The 18.75% that our managing partner agreed to seems pretty low, and is there a way i can find the current lease that our managing partner signed? Not getting very good cooperation and after a year i just found out about the %. Our managing partner says the lease was for 5 years, can we renegotiate after this lease?
You should also ask the Managing Partner for a copy of the partnership agreement and a list of the partners. Unless this lease has some very unusual provisions, the lease will be in effect for as long as it is producing and cannot be renegotiated unless you can drum up a default or claim against the operator. It sounds like you have a partnership problem. Get the agreement, and contact other partners to see if they are aware the managing partner signed an 18.75% royalty lease. There is strength in numbers, both legally and financially.
First of all, I’m not an attorney and not offering any legal advise. The following are just some thoughts.
The lease agreement will dictate who pays and how much the royalty payments will be. You can’t arbitrarily decide that you want your royalties coming from someone else when it isn’t specified in the lease agreement.
The 18.75% royalty does seem a little low.
Everything should be spelled out in the lease agreement regarding these matters.
Is the lease for a primary term of 5 years or is it one with a primary term of 3 years with a 2 year option?
If you try to renegotiate the lease, it will require other parties (lessors or other partners) involved to ask for it; though I doubt the lessee will consent to it since it means potentially more money out of his pocket and other things may have transpired since the lease was signed. This would make it more difficult to renegotiate since the operator of the lease may have other contracts placed into motion subsequent and based upon your lease agreement.
Did you seek legal representation when the lease was being negotiated? If so, your attorney may have a copy of the lease. He would be the one to ask if the lease can be renegotiated. If you didn’t have legal representation, you may have done yourself a huge disservice.
If you were not a signatory (party) to the lease agreement, then it will be very difficult to get a copy. If the managing partner signed the agreement on your behalf and he will not provide a copy, then you may have to seek legal remedy through the courts to obtain this document. If he won’t provide a copy that you are entitled to because of your business relationship, then the managing partner could be potentially hiding something.
Did the managing partner receive a bonus payment for the lease from the lessee? If you don’t know if a bonus was paid by the lessee, then you need to ask and find out how much. You may be entitled to a portion of that money if a bonus was paid.
I think leases are renegotiable, but I think it may prove difficult in your circumstances since not all the details are known.
My gut is telling me this sounds more like a dispute between you and the managing partner who signed the lease. To me, I sense there wasn’t any homework done investigating the terms and conditions of the lease prior to executing it by the managing partner or other partners. You may have to chalk this one up to experience.
Education is what you get from reading the fine print. Experience is what you get from not reading it. - Author Unknown.
Brianna - Yes, the bonus I am speaking of is on a per acre basis.
I suggest trying to work things out by getting a copy of the lease agreement before hiring an attorney. The document will be the basis of how royalties and bonus are paid. I would suggest being diplomatic, yet firm, in your approach since it’s easier to attract flies to honey than with vinegar when dealing with the managing partner.
A good oil/gas attorney will cost any where between $300-$600 / hour and they put the clock into motion at the drop of the hat. So, it would behoove you to try to work things out without spending that kind of money.
There maybe the possibility of the lease agreement on file with Ward County. At the least, there should be a Memorandum of Oil and Gas Lease on file with the county. You’ll need the legal description of the property, lessor and lessee names.
I suggest checking with the oil company since there may be a possibility in providing you a copy of the lease agreement. It’s a long shot at best, but worth trying to do.