I have been contacted with an offer to lease oil and gas rights on my property. I have 23 acres in Houston County and am being offered $500 per acre, 1/5 royalties for 3 years with option for 2 years at $400.00. I want to know if I can negoitate a better deal, this is their first offer. What are the going rates for this area.
Check out the Houston County, TX mineral owner group through the "Groups" - "County Groups" navigation at the top of the page.
You can also click this link: Houston County, TX Group
You'll find local landowners in the county groups.
This sounds like Chesapeake in the Austonio area of Houston County. Depending upon where it is it is worth more. Milestone Energy in Shreveport is leasing in this area as well as Cabot O & G. Houston. Cabot was paying $500/Acre for 3 years and a 1/4 royalty with a two year option west of Austonio.
I am about 4 miles east of Austonin, part of the Stephen Box Survey. I have been contacted by Western Chief, I do not know who they are working with.
Western Chief is a reputable drilling company from north Texas. They are working for themselves and not Chesapeake. They will pay you promptly unlike Chesapeake! You can probably get $550 or $600. for the 3 years. I would try not to ever lease for the 2 year option. After all, that does not mean they are going to pay you the 2 year option, it is their choice to or not. Lease bonus's 3 year's from now may be nothing or they may be $5,000 an acre. Think how you will feel if they do and you are tied up for 5 year's! I have seen several leases filed in the last couple of weeks in the Court House for 21% royalty. Cabot is paying a 1/4 about 6 miles west of Austonio. This play for oil in multiple completions in this area is not going away, it is only going to get better. They have not drilled the first well yet to prove the area up. 3-D seismic was shot there about 4 year's ago and this area and planned locations where selected with the 3-D results. If you don't need the money" hold their feet to the fire" They will eventually pay, if not someone else will.
Debbie Allen said:
I am about 4 miles east of Austonin, part of the Stephen Box Survey. I have been contacted by Western Chief, I do not know who they are working with.
I am 6.2 miles east of Austonia, close to Big Creek. I have had 2 seperate landmen representing " EOG resources" and "Devon energy" approach me about leasing. I am not sure how hot the area is,but EOG offered $850.00 per acre and Devon $700.00. I was told that Devon and Western Chief hold the majorty of land leased and that EOG was wanting in, but who knows. I am in no hurry and will let time take its course.
Just because you are leased to someone else, does not mean the majority lease holder will not drill. It means if you lease to someone else they will flip your lease to the majority leaseholder or participate. Drilling occours according to where the oil is. Companies share in each others wells, companies have net wells just as mineral owners have net mineral acres. 10 net wells might be spread out over 50 wells a company doesn't operate. The landman you are talking to us using salesmanship on you just as much as a used car salesman would, remember that.
r w kennedy said:
Just because you are leased to someone else, does not mean the majority lease holder will not drill. It means if you lease to someone else they will flip your lease to the majority leaseholder or participate. Drilling occours according to where the oil is. Companies share in each others wells, companies have net wells just as mineral owners have net mineral acres. 10 net wells might be spread out over 50 wells a company doesn't operate. The landman you are talking to us using salesmanship on you just as much as a used car salesman would, remember that.
Exactly RW, the more land leased , your company has more area to drill....... if you hit the oil you get to make the rules , remember that. In the mean time I will continue to sit on my cods .