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Eagle Ford Shale - Oil & Gas Discussion

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Eagle Ford Shale - Oil & Gas Discussion

Oil & gas discussion group for those interested in Eagle Ford Shale. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.

Website: http://www.eaglefordshale.com
Location: South Texas
Members: 431
Latest Activity: Jul 7

Discussion Forum

Royalty Payments getting lower and lower and lower....

Started by Robyn Barziza Chargo. Last reply by Bobby Grace Mar 28. 6 Replies

Hi all..My 2 siblings and I inhereted about 15 acres of mineral rights and lease to EOG.  We were soooo excited...in the beginning....since we've been getting payments (about 6-7 months) they have…Continue

Eagleford Update

Started by John Sabia. Last reply by Rock Man Jan 14. 19 Replies

As a mineral owner in the Eagle Ford, Vine Royalty likes to stay up on trends and happenings in the shale. Below is a list of moves made by the big operators in the Eagle Ford. Let me know what…Continue

Keywords: Natural, Resources, shale, Pioneer, Noble

2015 Review

Started by John Sabia Jan 6, 2016. 0 Replies

Overall, 2015 was a bust for the oil and gas industry. It has forced U.S. drillers and operators to cut down capital budgets by the billions. Law firm Haynes and Boone LLP on Dec. 4 released its “Oil…Continue

Dimmit County Short Term Lease Extension Request

Started by William Douglas Archer. Last reply by Rock Man Jan 5, 2016. 1 Reply

I have been asked to extend a lease by 68 days that still has approximately 7 months remaining.  This was originally an 18 month lease, with depth limitations and still has over six months to…Continue

Keywords: lease, bonus, market, extension

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Comment by Charles Newton on July 5, 2017 at 9:13am

Mr. Archer and Mr. Vinson, Thank you for replying to my message. I appreciate your extremely informative input.  I was able to increase the bonus to $650/net mineral acre.  Wildhorse (who acquired our lease from Clayton Williams) exercised the 3 year option which contained a 22.5% cost free royalty.  Again, thank you very much!

Comment by Martha McMorries on June 24, 2017 at 4:06pm

Mr Archer, What county?

Comment by William Douglas Archer on June 24, 2017 at 9:30am
Charles, i agree with Mr. Vinson that the offer seems low and i think that is obvious by their desire for six years of control via the requested three year option. That option benefits the Lessee, not the Lessor. If market were to crater, they will not exercise. If market surges, you can bet they will exercise. Heads they win, tails you lose.

I have been doing 18 to 24 month leases and when i can i have inserted a drilling obligation. Failure to drill results in an additional payment to me in what has been about 50% of the additional bonus.

Keep the bonus as you might neec to have an attorney encourage compliance as sometimes they fail to understand the definition of obligation.

Most recent EF deal i did was 750 bonus, 18 month term, 25% cost free royalty.

Good luck
Comment by Michael T. Vinson on June 24, 2017 at 9:05am

Mr. Newton,

I am afraid that is a pretty poor offer.  You are correct that there are several wells being operated on that tract.  Most appear to be drilled in the Austin Chalk formation with marginal to decent production.  One was drilled in the Eagle Ford formation in 2014 and is producing at over 3,000+ bbl a month.

If you don't mind sharing, how many net mineral acres do you and your brother own in this tract?  There more you have, the more leverage you will have.

I would think you could get well over $650 since that tract of land has established production.  I am hesitant to throw a number out as I am unfamiliar with Burleson County, and haven't worked in the Eagle Ford for some time.  A three year lease is fine, but I would not do a 3 year option.  A 2 year option may be reasonable if the operator has a lot of leasehold, numerous wells to be drilled, logistics of moving rigs, etc.  Anything more is not reasonable.  Anything less may be reasonable depending on the circumstances.  But in your shoes, I would probably say no thank you to an option.  As far as royalty, you need 25% because there is established production.  You may decide to go slightly lower with a substantial bump in bonus.  Last, make sure your terms are good.

Below is your tract, well the one right smack in the middle with "Porter" labeled on it.

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Comment by Charles Newton on June 24, 2017 at 3:59am

My brother and I own mineral rights in the JW Porter Survey, A-195, Burleson County.  Brett Harris of Harris Land Co. contacted us concerning a desire to extend our lease for an additional 3 years with a 3-year option.  He is offering $200/net mineral acre as a signing bonus with a 3-year option for $200/net mineral acre on behalf of Wildhorse Resource Development.  We were able to attain $650/net mineral acre from Clayton Williams in 2014 so the offer from Mr. Harris is sharp decrease in bonus amount.  If possible, I would like to find out the "going rate" for other mineral rights owners in the area.  According to http://www.texas-drilling.com/operators/wildhorse-resources-mngt-co..., I’m almost positive that Wildhorse has 2 wells in A-195 so it seems like we would be justified in asking for an increase in bonus.  Any input would be greatly appreciated.  Thanks!

Comment by Andy Lark on March 27, 2017 at 3:10pm

Greetings!  Does anyone know of the going rate for large water sales (for drilling and fracking purposes) nowadays in the Eagle Ford Shale area?  (I'm in the McMullen/Live Oak County area of TX, if it matters.)  Water was selling, I believe, for 50-cents/barrel some years back....  Many thanks for any information that you can please soon provide.  Thanks!

Comment by Rock Man on March 23, 2017 at 3:11pm

Not sure if they are still in bankruptcy but probably are. With no production on their wells (Since May 2014) and term expired, looks like open season to me. Anyone wanting to lease your property will run the traps on all this to make sure that they can get a valid lease

Here is the latest I can find on this / Dec 2016:

https://businessbankruptcies.com/cases/gambit-energy-inc

Comment by Jayne Burgin Stokes on March 23, 2017 at 3:04pm

Dimmit County - Mineral Rights Owner...
What is the status of Gambit Oil's former leases? ... are they still held by the bankruptcy courts? My leases have expired with this now defunct co.
Interested in rcvg new leases. Any replies, much appreciated.

Comment by Robert Eardley on January 14, 2017 at 11:23am

Doug,  It is a fee that is part of the Severance Tax it is part of the Crude Oil Production Tax that is collected and paid to the State Comptrollers office which is part of the severance tax.  Here a link to Comptrollers site https://www.comptroller.texas.gov/taxes/crude-oil/ hope this helps.

Comment by William Douglas Archer on January 14, 2017 at 11:14am

My lease form is one that very clearly a 25% cost free royalty. My position is that they are getting 75% of my minerals and I am not paying for anything against my royalty other than severance taxes.

I see that I am being charged for "Oil Field Cleanup"  Anybody know what that is?

 

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