Recently approached to lease my partial MI on two sections, one in southern Midland and one in northern Upton County by a large oil company. Two questions to the forum:
(1) What are current lease bonuses in Midland and Upton (most sections may already be leased)?
(2) Do these lease bonuses get reduced if section is already under production from the shallower Spraberry and Wolfcamp?
As my sections are already under production from horizontal Spraberry & Wolfcamp (original leases have vertical pugh clause), this lease must be for either Barnett or Woodford play. Any input would be appreciated. Thanks in advance.
You need to be much more specific as to location for anyone to comment. County, Block, Abstract name and number, and section. Geology varies, drilling varies, etc.
M_Barnes: Thank you for the reply. Trying to see what the current leases bonuses are for southern Midland Co., TX and northern Upton Co., TX. As these are regional trends that are nearly county wide, my area of interest covers Blocks 39 to 41, T3S, T&P RR Co (just south of Midland, TX, Midland Co.) south to Blocks 39 to 41, T5S, T&P RR Co (in northern Upton Co). In my situation, I am under a shallow lease that covers the Spraberry and Wolfcamp only, with deep rights below being open. Trying to see (1) what current lease bonuses are for both completely open tracts (may not be anymore of these left as the area is extensively leased) AND (2) bonuses for deep rights only tracts (i.e. below Wolfcamp). This area is obviously part of the Barnett and/or Woodford play as my shallow rights are under lease. There have been extensive Memo OGML for deep rights only (below Wolfcamp) filed in both counties lately, especially in Midland County so I know there are people out there making these deep rights only leases. Again, I’m trying to see what deep rights only lease bonuses are right now and how much discount there is for only leasing partial rights as my rights to Wolfcamp & up are HBP. Thank you and anyone else for their input.
Thanks. They will give folks who have leases more clarity on your location and they can comment if they wish.
Should be able to get 1/4 royalty, and I recommend you keep the vertical retained acreage clause in your deep rights lease because historically there has been production in that area below the Woodford. I recently leased in Block 42 T 4-S at $5,000/acre. Maybe could get even more if it’s a hot area.
dstallard. Thank you for the reply. Was your lease @ $5,000/acre for rights to all depths, or for limited rights below Spraberry/Wolfcamp only? Are you in Midland Co. or Upton as this block is on the county line with lands in both counties?
Upton, from base of Queen to top of Strawn
Sec 28, Blk 42 T 4-S
You are in the Concho Bluff, North (Queen) Field in Upton. Thanks for the reply & good luck!!
dstallard. Did your Lessee not want the Barnett/Woodford zones, or are these deeper formations already under lease? Just curious as your Section is in that play.
Correct, only wanted Wolfberry. Expect to hear from Diamondback soon re the deep rights.
dstallard: Best of luck on leasing your deep rights! Are there any other mineral owners out there in Midland or Upton Co., TX that have either (1) recently leased their deep rights beneath an existing shallower, HBP lease, or (2) made a new lease for their full rights/depths? Thank you.
Mostly #1. Many existing HBP leases go down only to Wolfcamp, Strawn or Atoka, so lots of deep rights remain unleased.