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.
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.
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:
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!
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-llc/923453, Iām 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!
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.
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
Mr Archer, What county?
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!
I have a San Miguel well for sale in Valley Wells please contact me if you're interested.
Adding to previous inquiry: :)
Question: Does adding the 'condition to drilling' i.e VERTICAL Wells only - take me out of the market?
Backstory: I have been in the Dimmit County 'oil play' for over 30 yrs & understand that my family's acres are over the Buda and do NOT need to be 'fracked'... therefore, I will request VERTICAL wells only be drilled - there has been one very successful vertical well drilled w/in feet of our property, however, it and the other acres were seized by the Bankruptcy Courts 3+ years ago.
Thanking you in advance - Jayne Burgin Stokes
Limiting your lease to "vertical wells only" will take you out of consideration for any horizontal and usually frac'd well - which is the only way many horizons will ever be drilled by operators.
This would include the Eagle Ford, Austin Chalk (in most cases), Buda (in most cases / vertical Buda wells are a rarity), Pearsall Shale and shallow Upper Cretaceous sands like the Olmos / Escondido / San Miguel.
There was an article in the SA Express News last week about lawsuits in Eagle Ford regarding royalties. It also mentioned the issue of "drainage" as being part of the legal action. It has to do with wells on neighboring ranch being drilled so close to the lease line that it is same as taking minerals from adjoining ranch. Not sure if it applies on my situation but I would like to hear from someone that may have more knowledge on this. I do have a Dimmitt County Ranch.
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l have mineral interests in subdivision I near Catarina Farms and would like to find a lease offer. Is there any activity in this area and, if so, what oil companies/landmen might be interested? Also, how much could l expect per mineral acre?