Fayette County, TX - Oil & Gas Lease

pd:

I did a drive by and nothing seems to be different than normal; but, quite honestly, there has never been any activity there since they got this well settled in. Just the way we would prefer a well to function since it has been pretty much maintenance free. Once it settled in, it started out producing about 300 bbls oil and 11,000 MCF gas per day and over about 30 months it has slowly dwindled down to about 50 bbls and 4000 MCF. The last posted production data was in April. Not sure why they are waiting so long to post data or if maybe they have shut it in for some reason.

Also, there have been two more wells permitted but never drilled from that same pad. One was permitted by Enervest, the Janecka 2h (6-23-2015) which follows the same basic SE line as the Janecka 1h which was permitted and drilled by Crimson: but, is supposed to be drilled a little deeper to either the Buda or the Austin Chalk. The other undrilled well is named the Pilar 1h and was permitted by Crimson (9-21-15) to be drilled to the NW.

I'll keep my ears open to see if we hear anything. If you come across any additional stuff, let us know.

Thanks!

Thank you!

Hello folks:

If you haven't already read this on the other Fayette County blog, Dusty posted a new website (CourtHouseDirect.com) for searching out court house filings. Dusty did a very good job of spelling out the good points, so rather than try to paraphrase what he said, I just copied his and pasted it below. I spent a couple of hours on this site this morning and found it to be a little easier to search and view than TexasFile. Since this was posted on the Eastern Fayette Blog, Dusty points out that Geo Southern and Sabine River LLC, not to be confused with the now bankrupt company, Sabine Oil and Gas, have been leasing. Geo Southern seems to be concentrating on the area between LaGrange and Schulenburg and Sabine River is hanging around closer to our area. It looks like they have been working the Muldoon area and probably most of the area that the old Southern Bay and their latest owners were drilling. Just in scanning, I did find one entry for Tracker Services which might be of interest to some.

See below thanks to Dusty!

"This is probably going to be old news since following you and the other vets on this site is how I've learned most of my research skills, but if you want the hot recording info go to CourtHouseDirect.com and sign up for their Lease Alert for whatever counties you are interested in following. They'll send you emails several times a month listing new filings that generally are about two weeks old. You can go through the index and just open things that looks interesting, and it's free. You can't search this like on TexasFile but it's current and did I mention free?

The last update I got on Fayette that covered filings through the end of July showed GeoSouthern still leasing in a corridor along Hwy 77 extending from LaGrange to I-10. In July they recorded about 10 new leases in Abstract-182, 2 each in A-231, A-37 and A-20, and leases on single tracts in A-79, 91 and 224. These were all lease memos so no details except for 3 year lease term. GeoSouthern and Sabine River Energy also recorded some lease amendments last month where they added 3 year extensions on prior leases that were expiring.

Hope this helps."

Hello folks:

To my knowledge, our Fayette County Blog has been totally quiet since August 23rd and there was very little before that. It still seems like most of the leasing activity is over around Schulenburg and LaGrange, much of which seems to be East of Hwy 77. The other Fayette Blog has been doing a good job of covering that; but, eventually the leases around our area will be expiring so the leasing or re-leasing activity should be picking up around here by early next year. With that said, since leasing time will be here before we know it, it would sure be nice to read over our leases and do our best to upgrade our leases integrating some of the stuff (lease issues) we have learned over the last 3-5 years.

The need to upgrade the Free Royalty clause was brought up on the other blog, so I am going to attach the Free Royalty clause exactly as it appears in my last lease. I'm sure this clause has lots of faults; but, it took lots of work hours to get here and I am sure it is a long way from being perfect so feel free to add or delete. We can never get a perfect lease or even a perfect clause; but, by sharing with one another, we can definitely improve.

3082-FREEROYALTYCLAUSE2014.docx (15.9 KB)

Hello folks:

Just a note to see if anyone is still interested or if this site is still active. Haven't seen or heard anything about the far Southwestern part of Fayette, basically North and West of Flatonia for quite some time. Some leases will be coming up for option renewal in the first quarter and second quarter and there will be a large number that will be reaching maturity in the first part of the third quarter, so if they are still interested, we should be hearing something shortly.

There is still a lot of interest on the East side of Fayette along Hwy 77. Initially Geo Southern hit the area hard, leasing much of the area East of Hwy 77 and now there are others that seem to be interested, so the leasing effort is now moving further and further West. Not sure what they are chasing; but, evidently someone knows something or some believes Geo Southern knows something since Geo Southern has thoroughly covered the area over the last couple of years. Just looking at the old Seismic Strata mapping, IMO, it looks like the main target strata is the Edwards which is supposed to be Wet Gas.

Just in case you get a visit, the main leasing companies in that area are: Geo Southern, Beland Energy, Riley Exploration and Ross Exploration. Sabine River has a few "clean up leases" between Flatonia and Muldoon and Enervest has one small lease. It looks like the going rate is now in the ball park of $600 and 22.5%.

Thanks for the info. What do you know about the Vinkarek and the Jameck 1 and 2 in your area??

No information on the Vinklarek well and can't even get the beginning production information to come up now. Still nothing on the three wells original Crimson wells just inside the Gonzales County line. As far as I know, there is still only one Janecka well and the last production data I can find is from August of 2016: Monthly oil production was a little over 1200 bbls/month and dropping off at about 100 bbls/month--------Gas is holding at slightly over 3,000 MCF/month.

Just wanted to clear up the last statement I posted about bonus and royalty since I have had a few questions. My limited experience is that most of these landmen/oil men are going to want to tie up the land as long as they can. Just makes good business sense from their standpoint. With that said they first "feel us out". They might offer a bonus number for a full 5 years or in some cases for 7 years. If that doesn't work, then the next step will usually be for what we normally refer to as a 3/2. For those that might be new to these sites, that means a 3 year primary term and then two option years. The $600 bonus offer I mentioned before is for the 3 primary years and then another $600 for the 2 option years. My personal preference is to lease only for 3 years total since the option years don't really mean much of anything to us to begin with. The option is totally in control of the one offering the money, so if the area turns sour or the market dies then they will not pick up the option years anyway or they may try to negotiate the option bonus down to a lower level or if the area really gets hot or the market starts to heat up, then the bonus number should improve.

I have some land in Muldoon that I would re lease

in East Bastrop county, we settled at $325 and 20% for 2 yrs only, no longer no options. they offered $200 we countered $550 and agreed at $325(which is low) many leases in Texas lease for as much as $1000, but then again it is not the boom time. Don't accept their initial offer, ever. This will be the only time you hold the cards, don't be afraid to negotiate. never go below 20% royalty either. just my two cents.

It all ties back to the geology and what is sitting under the acreage in question. A shift of a several miles can mean a big difference between prospective high bonus acreage and risky low to "we are not interested" acreage.

As anyone in Schulenburg, Fayette County, TX been contacted by either GeoSouthern Energy Co. or EOG Resources, about leasing of land for oil drilling? If so, what has been your experience with these companies?

I'm sure someone that has recently signed a lease with one of these companies will give you some feedback; but, Geo Southern has been working this specific area for well over a year now and have signed literally hundred's if not thousands of leases to this point. A few months ago, some other companies tended to get interested and now the activity has gotten more interesting. Since Geo Southern seemed to be he only one interested a year ago, they have, to a large part, leased up most of the area between Schulenburg, North and East toward LaGrange, mainly East along Hwy 77. They are now coming back and leasing the West side as well. A few months ago, a few other companies seemed to move into the area and seem to be concentrating more from Schulenburg South toward Halletsville. If you are interested in really understanding the Geo Southern leasing effort and what is involved, I suggest that you contact the office of attorney Mike Steinhauser in Flatonia at 361-865-2540. I have had conversations with a number of people that have been working with Mr. Steinhauser on a finalized lease.

The initial Geo Southern leasing offer back in October of 2015 was at $300/$300 for a 3 year primary and 2 year option and 20% royalty. Eventually they migrated upward to $500 and 20% and now I am pretty sure their offers are up to around $600/$600 for a 3/2 and 22.5% royalty. Obviously there is much more to a lease than these two initial talking points. That is the reason I suggest talking to one of the local attorney's.

Good Luck!

Joe,

Did you ever lease? I know BlackBrush is leasing and I can pass your number to a contact over there.

Bigfoot

Hey it's Don Purswell. I lost your contact info due to a computer issue. If you still have mine, email me or call me, I would like to talk.

Don:

I still had your e-mail from 4-5 years ago and if it is still active, you should have a message by now. If I don't hear from you within the next couple of days, I will send a message through the offline capabilities of this forum.

I no longer have your phone number either since I lost my phone a couple of years ago. Just so you know, my lease along with all the other contiguous acres around me (about 4000 acres) start dying in July and I haven't heard anything from our Land and Minerals guys. In addition to my group, there is probably another 4000 acres joining us that will be available in May or June. One thing for sure, the crude oil market isn't cooperating either.

BlackBrush from San Antonio is leasing and if your land is in their area of interest they would be a good company. They made some big wells in the trend and looking for more acreage. If you're interested contact me and I'll point you to the right person. Richard 214.914.1365

Kirch:

Thanks for the information; but, we will just wait and see how things go over the next 3-4 months. Our group of acres are a long way from the Hwy 77, Schulenburg, Halletsville, LaGrange and Fayetteville push that has been going on for the last year or so. We are located NNW of Flatonia about 9-10 miles and are hoping the original guys will pick up our leases as is, since we have an excellent lease that took many hours of hard work to hammer out and we don't want to loose that.

Thanks

No problem Bigfoot. Feel free to holler at me if you wish and I'll give you what updates I receive on the play. Good luck to everyone.

Yes Kirch, I did sign a lease last fall with Ross. The terms were better than GeoSouthern. I haven't heard anything else from Ross, so I guess it's just wait and see. Thanks!