I am a Certified Professional Landman in Fort Worth, Texas. I have joined your Fresno County, CA Group in an effort to try and discover (for one of your neighbors and fellow mineral rights owner), what is going on there.
I've done a little research and over just the past few years, various companies have filed over 4,200 new Oil and Gas Leases in Fresno County - effecting lands almost exclusively in the Southwestern part of the County.
But I have not yet been able to find any wells being permitted to anything I would describe as an exciting formation. Only to fairly ordinary, relatively shallow, relatively low producing formations.
Can anybody tell me what the "Play" is? What formation the companies are so excited about?
It is the Monterey Shale play. In California the Department of Oil, Gas and Geothermal Resources ("DOGGR") is the governmental entity that regulates oil and gas production (similar to your Railroad Commission as I understand it). DOGGR allows new wells to be placed on a "confidential" status for up to two years. Therefore, it is likely that there is no reportable information available.
From what we hear, however, the few wells that have been drilled are mostly for testing purposes. There have been mention of a few wells that are not producing as anticipated, but again this is anecdotal.
It has been said that the Monterey Shale will rival all of the fields recently discovered, assuming that they can produce it. The industry has known about the play for years but, of course, the technology for commercially producing it is recent.
With what is happening in the various shale plays around the country, we may finally be able to produce enough oil to address our country's needs without further dependence upon foreign supplies.
I am trying to find out about the leasing terms and drilling activity in the northwest quarter of the Fresno county. My cousins and siblings own the mineral rights only to 160 acres located in township 18 south, range 17 east, section 28 in the northwest quarter. We’ve been approached by Onshore with an offer of $40 per acre and 1/6 royalty. Thank you.
Almost 12 months later… We also are trying to find out about leasing terms, and any exploratory drilling or production in the northwest quarter of Fresno county. My mother, cousins and siblings own the mineral rights only to 40 acres located in township 13 south, range 17 East section 30 in the Northeast quarter of the northeast quarter. We've been approached by West Coast Land Service with an offer of $15 per acre and 1/8 royalty with an undisclosed oil company. Does anyone have recent lease terms or offers? Advice on how to counter-offer? And advice whether to contact other land men, sign the proposed lease, or just wait? My mom's been told that "an oil company considers royalty terms to be non-negotiable", but from an hour spent browsing other posts there seems to be a range. Thanks!
Andrea Gherini said:
I am trying to find out about the leasing terms and drilling activity in the northwest quarter of the Fresno county. My cousins and siblings own the mineral rights only to 160 acres located in township 18 south, range 17 east, section 28 in the northwest quarter. We've been approached by Onshore with an offer of $40 per acre and 1/6 royalty. Thank you.
The $15 per acre is low, as is the 1/8 royalty. While it is a forty acre parcel, if you only have a very small percentage of that then the oil companies are typically less likely to negotiate. A low rent should be $25. And, a 1/6 royalty is fairly standard.
While the oil companies like to remain anonymous, as a lessor you have the right to know who is leasing your minerals. If, however, they do not wish to negotiate and do not wish to name the oil company then you are left with not leasing or signing the lease and hoping that someone drills and produces oil. At a minimum, if they are unwilling to negotiate, then I would not give them anything more than a 5 year lease. Typically, they will have an option for another 5 years but that should be stricken. Thus, you'll be in a lease for five years but if the oil company doesn't drill by then at least you'll be open to have another company come in at that time.
I signed a lease with West Coast Land on April, 2012. It is located at government lots 3 & 4 in section 30, township 18 south, range 17 east, M.D.B. & M. I have tried to find out if there is any movement of progress on the property or any surrounding areas to no avail. I sent West Coast Land questions and there response was to refer me to our contract. How can I find out what, if anything, is happening in this area. thank you. Blythe