I have a pending offer of $900 on primary term, $1,000 two-year extension, 22.5% royalty interest, Section 74, Block 34, H&TC RY Co, Ward County, TX. It’s this reasonable? I have two family members who will probably take it, no questions asked, was just curious what the norm is right now. Thanks.
I have learned a lot has to do with where you are in the county. The $900 is low in my opinion.
Our family used Wade Caldwell to assist in negotiations and he was very helpful. He is on this thread and may be worthwhile contacting him.
Linton,
I would not take anything with a royalty less than 25% and would be hesitant to take a lease with an extension in it. The extension is really a benefit to the oil company and not to you as they would not exercise the lease extension if the prices go down and you are stuck with the current value if the prices go up. You want to take a lease with a company that plans to drill sooner rather than later and the shorter lease term indicates that they are more interested in drilling in the near term.
Additionally, the $900/acre is low. We are getting $1,500 to $2,000 for our Ward County properties. We have had some good wells in Block 34, Sections 168, 176 and 149, so there is something in that area.
A voice from your Pecos past - Mary Bird (Dean) Bowman
Is the $900.00 for the primay term per acre of ownership? The Money should be paid per acre bonus money for the intial lease. Is the compay going for oil and gas or just one of the products?
I don't know what the current rate is in Ward County but $900 per acre is more than we received a few years ago, today this is low.
I have heard of $2000 per acre for bonus money.
Normaly leases are for 5 years and if oil is found they are continious until the well stops producing and the company releases the well.
The extension is new to me but I think it should be paid per acre and not just $1000.
DO NOT ACCEPT LESS THAN 25% ROYALTY MONEY FOR YOUR PROPERTY.
I would recommend you obtain an attorney who can lead you through this process or you will get
SHAFTED BY THE OIL COMPANIES AS THEY ONLY CARE TO LEASE AS CHEAP AS POSSIBLE AND DON'T CARE ABOUT YOU. Do not sign any documents without an attorney representing you.
You have to protect you and your family members. There are long term enviormental issues to consider! You might also have the lessee pay your attoney fees as it have been done before.
Mary Bird, how great it is to hear from you! How many memories we share. I especially think of your family this time of year and the great parties we had at Christmas time!
I knew prices were going for more but I’m kind of curious how to proceed from here. Merry Christmas to you and yours! Linton
Mary Bird Bowman said:
Linton,
I would not take anything with a royalty less than 25% and would be hesitant to take a lease with an extension in it. The extension is really a benefit to the oil company and not to you as they would not exercise the lease extension if the prices go down and you are stuck with the current value if the prices go up. You want to take a lease with a company that plans to drill sooner rather than later and the shorter lease term indicates that they are more interested in drilling in the near term.
Additionally, the $900/acre is low. We are getting $1,500 to $2,000 for our Ward County properties. We have had some good wells in Block 34, Sections 168, 176 and 149, so there is something in that area.
A voice from your Pecos past - Mary Bird (Dean) Bowman
Thank you, Mike. Yes, I know prices have escalated recently. My father was an attorney, so I know better! I am going to try to get a better deal, although I did find out my other family members agreed to the lesser terms.
Mike East said:
Is the $900.00 for the primay term per acre of ownership? The Money should be paid per acre bonus money for the intial lease. Is the compay going for oil and gas or just one of the products?
I don’t know what the current rate is in Ward County but $900 per acre is more than we received a few years ago, today this is low.
I have heard of $2000 per acre for bonus money.
Normaly leases are for 5 years and if oil is found they are continious until the well stops producing and the company releases the well.
The extension is new to me but I think it should be paid per acre and not just $1000.
DO NOT ACCEPT LESS THAN 25% ROYALTY MONEY FOR YOUR PROPERTY.
I would recommend you obtain an attorney who can lead you through this process or you will get
SHAFTED BY THE OIL COMPANIES AS THEY ONLY CARE TO LEASE AS CHEAP AS POSSIBLE AND DON’T CARE ABOUT YOU. Do not sign any documents without an attorney representing you.
You have to protect you and your family members. There are long term enviormental issues to consider! You might also have the lessee pay your attoney fees as it have been done before.
Royalty and bonus are low, in my opinion, but you may want to look at the video tutorial on the home page on how to check activity in your area on the RRC website.
Thank you, Mr. Caldwell, appreciate your time and input, I will take advantage of that.
Mary,
We must share an interest in Ward Sec 149. I would love to discuss how your relationship with the producer is going. let me know.
Mary Bird Bowman said:
Linton,
I would not take anything with a royalty less than 25% and would be hesitant to take a lease with an extension in it. The extension is really a benefit to the oil company and not to you as they would not exercise the lease extension if the prices go down and you are stuck with the current value if the prices go up. You want to take a lease with a company that plans to drill sooner rather than later and the shorter lease term indicates that they are more interested in drilling in the near term.
Additionally, the $900/acre is low. We are getting $1,500 to $2,000 for our Ward County properties. We have had some good wells in Block 34, Sections 168, 176 and 149, so there is something in that area.
A voice from your Pecos past - Mary Bird (Dean) Bowman