Grimes County Leasing Opportunity


#1

Does anyone know if activity is picking up in Grimes County. Got an offer from someone representing Apache. Offer was initially 1000/Acre and 1/5 Royalty. We declined and they upped to 1200/Acre and 22.5%. We declined again and now they are asking what offer we are looking for. Seems aggressive for an area that is usually under the radar. Looks like there might be some pipelines going thru the county that Apache is building, would that impact offers? Do they need mineral rights leases to run pipelines?

Relative newbie here.


#2

If they merely wanted a place to build a pipeline, they would probably ask for a pipeline easement. Shortest answer possible is: No, they don’t have to have an OGL in place to build a pipeline, although the OGL usually does confer the right to construct pipelines for the purpose of transporting production off the lease.

It would certainly help to know where your acreage is located in Grimes County in evaluating this offer, and how much mineral acreage is involved. The last time I bought leases in Grimes County in 2013-2014, we wouldn’t have had very many lessors turn down $1,000/acre, and those that would have done so would have controlled several thousand acres in the middle of the play. Interest in that area waned significantly in 2014-2015, and I’d be surprised if there were too many leases going for $1,000/acre today in Grimes County.

Usually, when a landman asks “What kind of offer are you looking for?”, they’re looking for confirmation that your asking price is going to be too high to justify any further effort on their part.


#3

Or trying to get you to put a ceiling on what you want. Always try to get the landman to make the first offer and ask if that’s the best he has paid in the area.


#4

Thank you for the feedback!