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Fayette County, TX - Oil & Gas Lease
We need information cocerning the fair market value of oil and gas lease in fayette county tx. Many people in this area are quick to sign their land for $200.00 per acre for 3 years with the leaser having the option to continue the lease for another $200.00 for the next 2 years. We're asking is this a fair market value and is the length of time (5 yrs) is too long to tie up the land. A .187 royality is also being offered should there be any drilling. We were told by our family lawyer to hold off as the activity in Fayette county will pick up alot during the next 5 years. We are located in Schulenburg,Tx.
Keywords: Eagle Ford Shale, Fayette County TX, Schulenburg TX, Texas, lease negotiation, market value, mineral rights, time
Replies to This Discussion
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Permalink Reply by Mike Igau on -
I assisted my nephews who have a mineral interest in Fayette County last year. The terms you have been quoted is about what was being offered at that time. Typically I have found the average royalty interest rates being offered are in the 20% range with three year primary term to drill with no extensions. I am curious as to what your Family lawyer advised and the reason. Is he an O&G ATTY? If he does O&G work he would most likely have access to drilling/leasing information services that would detail mineral lease offers that are current and recorded at the County Court House. This can be quite valuable in negotiating a new mineral lease. Another research tool is the TRRC(Texas Railroad Commission) web site. This will detail recent drilling permits and production in your County.
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Permalink Reply by ben J. dach on
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Have you heard of the Eagle Ford Shale formation that runs through this area. The drilling should pick up within the next 3 to 4 years. Yes he is an O&G ATTY. I hoping for the best!!!
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Permalink Reply by Mike Igau on
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Yes I have heard of the Eagle Ford Shale and I suspected that activity could expand beyond far S TX. It is probably similar to the Barnett Shale when only three counties (core area) was being drilled initially. The Barnett has now expanded to over 15 counties. The same thing may happen with the Eagle Ford going northward. The value of the mineral lease may depend on the commercial viability of the shale formation in your area and the formation's thickness. That will be determined by seismic survey's and drilling. Watch for the seismic survey activity.
ben J. dach said:Have you heard of the Eagle Ford Shale formation that runs through this area. The drilling should pick up within the next 3 to 4 years. Yes he is an O&G ATTY. I hoping for the best!!!
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Permalink Reply by tkjjz on -
We were offered the same lease for some land in Engle....is there an oil company requesting our leases or are they sitting on our leases? Did you sign the lease?
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Permalink Reply by ben J. dach on
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No, we have not signed any lease at this time. We are waiting for more offers as there are several lease companies working the area I'm being told. As for as I know these are just lease companies, do not own a rig but will release our land to an oil company for drilling and make a few bucks off of us for themselves. We are going to wait for awhile and see what else might happen. Hoping to lease to an oil company and cut out the middle man. We'll have to wait and see!
tkjjz said:We were offered the same lease for some land in Engle....is there an oil company requesting our leases or are they sitting on our leases? Did you sign the lease?
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Permalink Reply by Mike Igau on
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I did a bit of research looking at the Eagle Ford activity to see where it may be headed. I found activity trending northward into Atacosa and Karnes Counties. EOG seems to be a big player at the moment.
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Permalink Reply by Laurie R on
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Hello, I am a land owner who has 100% of my mineral rights in Wilson County Texas in the Eagle Ford Shale. Right now Geophysical is working on siesmic testing and is offering land owners $10 an acre to do the testing on their property. There are a number of land owners, me included, who feel that they should pay at least $30 and acre, and provide the results in a certain format. Geophysical does not want to do that, so there is a little over 1000 acres that has to be listed as "no permit." I also just received an offer to lease my oil & mineral rights for $300 an acre. the landmen that are making the offers are looking to turn the land over to the oil companies for about $3000 - $6000 an acre. The offers in the Wilson County area vary greatly. Some people are being offerd as much as $1100 an acre, and some as little as $200 an acre. The Eagle Ford Shale is the next biggest thing, and it will soon become a very "Hot" area. What needs to happen is, the land owners need to stick together, and talk and be upfront about the offers they are getting, and from whom. If everyone sticks together, there is a very good chance that they can negotiate a better price. If you have land in the Wilson County area, and want to talk please respond to this post with your phone number and I will contact you and see if we can work together. I am not a lawyer, but I do have an excellent oil and gas Attorney. Also there is a very good website that provides a lot of good educational information on the Eagle Ford Shale. www.mineralweb.com Thanks.
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Permalink Reply by Laurie R on
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If you have land in Gonzales, Wilson, Karnes, or Atascosa County, you are located in the Eagle Ford Shale. There will be a free Informational land owner meeting on Tuesday June 15th at 6pm at the Wilson County Show Barn. There will be a number of speakers available to inform land owners about the Eagle Ford Shale, and how important it is to stick together to work to get a better price per acre for Oil & Gas leases. There are many Oil & Gas companies in the area that have hired landmen to make offers to the land owners to lease their property; however, most of the offers have been very low; for example, $200 an acre for 3 years with the option to extend for 3 more years. Land owners in Atascosa county put together 5000 acres and were offered $900 an acre by EOG.
Thanks,
Laurie
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Permalink Reply by Stephen Polnick on -
I have confirmation that bonus are currently being paid in fayette county tx on the R. Smith survey at $600 to $1000 per acre for 5 years with .18 royality. We were contacted yesterday by a landman offerering $300 per acre for three years and a two year option for $200 per acre with 1/5 royality. I had a nice and cordial discussion with the landman and stated his offer was a starting point and the land along our back fence was just leased for $600 per acre with .18 royality. He stated he would get back to me. The landman contracts to Charlie Hudson & Associates who has been retained by Cypress E&P company.
I believe $600 per acre should be the minumum starting point and go up. I am also seeing the bidding between the different players start based on feedback from our attorney, neighbors and family in the area. I agree with Laura land owners need to stick together and be up front with what is going on in their area. The two other companies working the are Omnimex and Southern Bay. There was another company but have learned they dropped out and sold their leases to Omnimex. Has anyone heard of any other companies working the area and on what surveys?
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Permalink Reply by German American on -
The play is just starting to get into Fayette County. If you can afford to, wait and talk to the different companies. I heard a new crew just started on Monday.
Stephen Polnick said:I have confirmation that bonus are currently being paid in fayette county tx on the R. Smith survey at $600 to $1000 per acre for 5 years with .18 royality. We were contacted yesterday by a landman offerering $300 per acre for three years and a two year option for $200 per acre with 1/5 royality. I had a nice and cordial discussion with the landman and stated his offer was a starting point and the land along our back fence was just leased for $600 per acre with .18 royality. He stated he would get back to me. The landman contracts to Charlie Hudson & Associates who has been retained by Cypress E&P company.
I believe $600 per acre should be the minumum starting point and go up. I am also seeing the bidding between the different players start based on feedback from our attorney, neighbors and family in the area. I agree with Laura land owners need to stick together and be up front with what is going on in their area. The two other companies working the are Omnimex and Southern Bay. There was another company but have learned they dropped out and sold their leases to Omnimex. Has anyone heard of any other companies working the area and on what surveys?
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Permalink Reply by Laurie R on
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Hello Everyone,
I just held the first land owner meeting at the Wilson County Show Barn in Floresville, TX on June 15th, and there were over 200 people in attendance. The speakers provided good information, and I think a number of land owners were surprised to learn that their land sits in the Eagle Ford Shale, and what it means to them as land owners. Right now things are just starting to heat up in Wilson County, we are in the Oil Window; however, offers have been low, and EOG covers most of Wilson County. The offer I received was $300 per acre for 3 years, with a 3 year option from Denali Oil & Gas. After receiving the offer from the landman, I picked up the phone and called the company directly to ask if that was the best they could do. I was told the highest they would go would be $400 an acre, then after talking to my neighbor across the road, he was offered $500 from the same company. (That made me mad, and that is why I called the meeting, in addition to the fact that everyone I spoke to did not know what the Eagle Ford Shale was.) We have time in Wilson County to search for better offers. Global Geophysical and Dawson are doing a siesmic survey now, which will take some time. I refused to let them on my property because they only wanted to pay $10 an acre (I did get them to up the price to $15 per acre) but they refused to give me a copy of the info under my property, and they wanted access for 12 months. What I did learn is that if you do a siesmic survey and they find nothing, you loose bargaining power with the Oil & Gas Companies, so I am glad I refused.Like I said EOG and Denali Oil & Gas are covering most of Wilson County, and it would be great if we could get some more competetion to help raise the offering price.
Thanks,
Laurie
Steven Beettner said:The play is just starting to get into Fayette County. If you can afford to, wait and talk to the different companies. I heard a new crew just started on Monday.
Stephen Polnick said:I have confirmation that bonus are currently being paid in fayette county tx on the R. Smith survey at $600 to $1000 per acre for 5 years with .18 royality. We were contacted yesterday by a landman offerering $300 per acre for three years and a two year option for $200 per acre with 1/5 royality. I had a nice and cordial discussion with the landman and stated his offer was a starting point and the land along our back fence was just leased for $600 per acre with .18 royality. He stated he would get back to me. The landman contracts to Charlie Hudson & Associates who has been retained by Cypress E&P company.
I believe $600 per acre should be the minumum starting point and go up. I am also seeing the bidding between the different players start based on feedback from our attorney, neighbors and family in the area. I agree with Laura land owners need to stick together and be up front with what is going on in their area. The two other companies working the are Omnimex and Southern Bay. There was another company but have learned they dropped out and sold their leases to Omnimex. Has anyone heard of any other companies working the area and on what surveys?
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Permalink Reply by John Kainer on
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Ben,
I have land just outside Schulenburg (~3 miles) and in the last 2 weeks have received offers of $1000.00/acre bonus, 5 years lease at @20% royalty. Then, a week later, $1600/acre bonus, 3 year lease with option for 2 more at $250/acre, @25% royalty. Another landowners meeting soon, but for me, the time is approaching to sign. This play, based on history to the south and west of us looks big. But the key seems to be in gettting larger tracks of contiguous land (at least 640 acres by working with neighbors to communicate with a common landman. I would be interested in any other recent offers in this area.
Also, has anyone investigated the potential problems with this unconventional drilling destroying our precious countryside?
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