I'm trying to understand the deed from Reeves County, Texas. I've been contacted by numerous companies for lease, or for purchase. The rights are small, percentages, and I want to make sure I understand the language completely.
It states All of Section 13, D.W. Washburn Survey, Save and Except the following:
I've attached a photo. I understand the property is small enough that the Trust can't afford to hire a lawyer, but I want to make sure I can make reasonable negotiations for the Trust.
Any advise is welcome!
Thank you so much,
Justyn
613-mineralrights.jpeg (116 KB)
Schedule A in your attachment also cites a second tract in Section 27, Block C-9. Is this the only page or are there additional tracts? Both descriptions are for large tracts, but from your post it appears that the fractional interest in each tract may be small. Before you sign a lease, you need to be sure about the net mineral acres (fractional interest X gross acres) that are in the trust.
Are you certain that Section 13 minerals are not under lease? Your trust may be due back royalties if it is not being paid. There is a producing well, Copperhead 23 1H, which is operated by MDC Texas Operating. MDC permitted a second well, Copperhead 23 2H, on December 30, 2016. Do not be fooled by the well names, as the horizontal lateral wellbores cross 3 sections. Any purchase offer should be at a very high price per acre which is another reason why you must determine the net mineral acres. You might consider contacting MDC directly about leasing the minerals or the existence of a lease.
Lease bonus rates could easily be in the $5,000+ per acre range. So you may want to talk with an attorney, particularly if the trust is currently unleased mineral interest in an operating well.
Thanks so much for this. Yes, part of the interests are being leased. I signed a contract with Red Willow 2 years go (wish I had known more). The royalties are minimal. That is why I haven’t hired a lawyer- it would cost more than any net revenue. I’ll double check, but as I understand it this is the only page of the deed.
MDC who took over Red Willow is looking to lease more interests, but they’re only willing to offer $3500/acre even when I asked for $6,000. I’ve also asked for no cost royalties, no marketing or production costs.
Additionally, another group has offered $8,000.00 to purchase the rights and royalties outright. I’m not making any decisions until I understand all of this…
I’m guessing that interests have value because of the location? Even though small?
See below for how Shawn Storrie has explained it. He is the MDC representative, or intermediary:
The trust owns a different percentage in each tract. I blended the acreage from both to come up with an ownership percentage for the total:
% owned
net acres
gross acres
blended
0.312500%
0.2553125
81.7
0.156250%
0.2706250
173.2
0.5259375
254.9
0.206331%
So, across both tracts the trust owns slightly more than 2%, which equates to slightly more than 0.5 net mineral acres. Not much to speak of, but it counts.
Thanks again for your feedback.
Greetings,
I'd love some feedback for this recent offer for our small interest in Reeves County:
-$4,500 per net mineral acre paid-up bonus
-no-cost royalty except for transportation to a more favorable market
-no delay rentals
Does this seem appropriate and fair?
Thank you for your time and attention!
Justyn Livingston
