I recently received a lease offer on 16% (37.1875 acres) of 595 acres in Frio County, situated in the B. Soleto Survey No. 309, A-599. I inherited these mineral rights, and I have never been to Frio County, nor do I know anyone living there with whom I could consult. The offer was for $250 per acre/ 3 yr./ 20% royalty. The landman made the offer on behalf of VirTex Producing Company. When asked, the Landman told me that the rest of the interest had been bought out by an oil company. I do not know if this is a fair lease offer, or how to go about negotiating for more if it is low. I also don’t know if it is to my advantage or not that an oil company holds the rest of this interest on the 595 acres.
The ranch to the East of me (on CR 2410 - San Miguel road) leased to VirTex at $250/acre & 22% royalty. These days the market for royalty seems to be closer to 25%. Others with leases in Frio county are: ZaZa, Cabot, Maverick and Howell for example (there are others of course). Maybe Mr. Wm. Deal Fair will tell you who has leased the other 84% of the mineral rights. Who has control of the surface? These days landmen are held to high ethical standards - do not resist asking hard questions of them. When signing a lease - get professional input/help; the forms have changed as well as the “game”. Water rights and “Pugh” clauses are important. For $10,000 bonus money you can’t afford to spend too much on legal counsel - but you still need it. Have your counsel review the lease the other owners signed - that way the counsel does not have to produce a document from scratch. Best wishes and good luck. George
Brenda this acreage has 2 recently permitted wells by Virtex nearby. It also has 2 Blackbrush wells permitted. nearby. please email me at jimmy.whitley@fuelmasters.com
I can give you a little more information then.
Do you have any more information pertaining to the current offer? Any updates?