We hold 300+ acres in the Fayetteville Shale in Johnson County, Arkansas. We have been approached by land agents regarding same. Anybody out there with experience in this area and/or with Seeco or other?
Thanks!!
I have minerals in Conway and Pope counties. what are you being offered so far? bill
Bill:
Lots of “fiddling around” between Seeco and land agents. No real coordination between either side. Sometimes want 40 acres, 80 acres, then 200+, then 40 acres, etc.
Tentative offer is $250/acre for 5 year lease with option for 2nd term of 5 years for $500/acre. Royalty at 1/8 or 12.5% with language obviouisly fully favoring the leasee.
We want strong language idemnifying us, clarification of surface use damage, water use and a separate Surface Use Agreement (SUA), et al., following US Forest Service requirements. Probably won’t give a 5-year option – maybe a Right of First Regusal. We don’t know if we want to lease 40 acres, 80 acres or the whole thing initially. Any thoughts?
Also, we are considering “shopping” the deal to all the Fayetteville Shale operators versus just Seeco and/or their land people. Thoughts??
Some neighbors have leased at $200 to $300, we think.
Anyway, our thoughts are $500/acre on a short term deal with 3/16 royalty and suitable liability and other language. We have joined the Ozark Highlands Federal (BLM) Unit, but obviously have not leased yet. We’re also questioning whether to simply “sit tight for now” and wait or to “shop” the deal. Gas prices are low now, but will probably go up.
We are on the west end of the Fayetteville play versus your situation in Pope & Conway, but eventually feel action will extend westerly.
Any insight or suggestions are appreciated!
Linn
Linn, I do not feel qualified to give you advise but I can tell you about our own personal experience. We leased 5 years ago for 225/acre and 1/8 royalty in Conway county. The current offered price in the same area is 2000/acre and 1/5 royalty. Remember the lease folks start early before the drilling in order to get the cheapest price. We have some minereals coming out of lease in Pope county next August. Some folks have been contacting us with an offer of 250/acre. We plan to wait a year or two until the drilling activity picks up. If it turns out like Conway county, we can lease for a lot more than 250/acre. I saw the other day where the state of Texas gets a minimum royalty of 22.25% on all state lands. Seems to me that we can get that much in good gas areas. thanks, bill
Linn Leeburg said:
Bill:
Lots of “fiddling around” between Seeco and land agents. No real coordination between either side. Sometimes want 40 acres, 80 acres, then 200+, then 40 acres, etc.
Tentative offer is $250/acre for 5 year lease with option for 2nd term of 5 years for $500/acre. Royalty at 1/8 or 12.5% with language obviouisly fully favoring the leasee.
We want strong language idemnifying us, clarification of surface use damage, water use and a separate Surface Use Agreement (SUA), et al., following US Forest Service requirements. Probably won’t give a 5-year option – maybe a Right of First Regusal. We don’t know if we want to lease 40 acres, 80 acres or the whole thing initially. Any thoughts?
Also, we are considering “shopping” the deal to all the Fayetteville Shale operators versus just Seeco and/or their land people. Thoughts??
Some neighbors have leased at $200 to $300, we think.
Anyway, our thoughts are $500/acre on a short term deal with 3/16 royalty and suitable liability and other language. We have joined the Ozark Highlands Federal (BLM) Unit, but obviously have not leased yet. We’re also questioning whether to simply “sit tight for now” and wait or to “shop” the deal. Gas prices are low now, but will probably go up.
We are on the west end of the Fayetteville play versus your situation in Pope & Conway, but eventually feel action will extend westerly.
Any insight or suggestions are appreciated!
Linn
I also have mineral rights in conway county. Currently in our area forced integration is 1250/acre & 1/6 royalty. This is usually a good reflection of bonus and royality
How can you estimate how much your minerals are worth or how much return you would get after drilling started? I used the estimator on a web page I found but it varied from 10000. To 20000000.
Penn Kelley said:
I also have mineral rights in conway county. Currently in our area forced integration is 1250/acre & 1/6 royalty. This is usually a good reflection of bonus and royality