Kings County, CA - Oil & Gas Discussion archives

Oil & gas discussion group for those interested in Kings County, CA. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.

I have a lease offer here but I have declined to sign it, as 1. its too low, and 2 no amendments, and 3. they refuse to give me the contact info on the other owners who are distant members of my family that I have lost contact with. I own an undivided share of 100 acres. they want to sign me up for 5 years and a small dividend if they find gas. As I understand it they can renew the lease up to 20 years if they do find marketable minerals. This is way too long at the present price offered. Its 50 an acre, which for me is about 500 dollars for one year. Anybody?

Hi, Lisa. I also have an offer I’m not ready to sign. I don’t know the operator yet, but the landman is Melissa Fisher for Lone Star Energy. My property is Township 23 South, Range 17 East, Section 6. The offer is for $65/acre/year for 5 yrs with an option for 5 more @ $75. Royalty offered is 3/16. What amendments are you looking for? I’m trying to learn all I can in a short amout of time. May have to pay an O&G lawyer, but trying not to. From what I’ve read so far, the rate offered is good, above average, in fact. But I don’t like the 5/5 yrs. and I’ve read I should ask for a 1/5 royalty. This property was under lease in 1981 and the lease never extended. Now, 31 years later it seems several people are getting these offers. Is that perhaps an indication they (operator) have new info? I don’t know. Not sure what to do. I did see that there is drilling going on a couple of parcels west of our property. Where is your property located? I’m also going to ask for info on two other owners, nieces with whom I’ve lost contact and see what they say.

Lisa, Isn’t 1/5 royalty the standard? We have a couple Landmen interested our property. Do they tell you who they are landmen for? The little bit they offer per year isn’t what you care about the royalty is.

I would say…you want 1/5 that is the going rate plus they know it is a producing area as you have a well on it … You might ask for 1/4 and take 1/5… But how do you know what the production numbers are? They using their numbers right?

Patricia… My below comment was for you…

peggy thank so much. should i naskj for upfront money for a 5 year lease

yes…they should offer you at least 65.00 up per acre per year, since it it already producing. I would also ask for a time line as to exploration also.

Is it the same company that operates the well you have? You might tell them you have been contacted by another landman or you will contact another oil company. I don’t know where your land is located but from what I am told there are about 5 or more landmen and companies looking for oil leases. Their offer should be upfront money for at least a couple of years of the 5 year lease.


Is it just me or don’t you find it interesting that we are all women dealing with all these men in the oil business!!

Just say’s...It is Kind of interesting!!!!

I am still on the leasing part. I have told them no deal until I can contact the other owners. My parcel is section #35.Township 24 S, R 18 E, M.D.B.&M.Offer was 50 an acre for 5 years, no other terms except 1/6 royalty of 1/9 share. The landman, Max Williams, has changed as the he claimed the contact info was proprietory . Lone Tree is the one making the offer. My relatives signed as they own part of this. I got it from my mother who is deceased. She let it go to OXY and Cody for 10 dollars an acre and 1/8 share. (&%$##@#)As far as we can tell there is no development yet. My relatives have Section 16 and that has produced some. My undivided interest is a bit more than 11 acres. The new landman just didnt answer when I told him my terms. It has been a waiting game with these people.

These landmen think they are dealing with low hanging fruit, like our mothers and grandmothers etc. and are used to getting everything dirt cheap and reselling our leases at a profit to someone else. So sorry we cant be more accomodating!

Lisa …You go Girl

So I’m thinking we’ll ask for 1/4 and settle for 1/5 royalty. Anybody have any ideas on the 5 year lease with a 5 year option? Is that standard?

I think they can extend the lease for 20 years if they wish. I would want that to be covered in any contract, to account for inflation. I would like to see a contract with all the amendments in it so I can use them myself.I know someone on this forum has that.Also, if you get paid all at once it could raise your income taxes. That will probably cost you. If they pay you once a year, that wont happen.

As for the 80 acres with a producing well. Is it making money? You need to research that. Is the 1/6 all yours or not?

Yes, Lisa it would be super to see an amended contract. I have no idea of all the thngs that should be covered. I’ve emailed 2 O&G attorneys and am waiting for replies on costs to review and make suggestions, but if someone has a contract they’d be willing to share, that would be so great. I do income taxes during the season and you’re right about the tax bite. It would all be taxable, but a larger lump sum could increase tax liability. Just depends on other income.

NOT MUCH AND WAY TO LONG .. 25%, 1YRS BEST 3YRS MAX..hOLD OUT FOR ALL YOU CAN GET... THEY WON'T GO AWAY.. If it farm ground get more to cover surface damage..Find the Companies that are drilling around you! If there isn't any take what you can get ( if no one has thump the ground) on the shortest lease; while the value goes up. My grandfather ( Lemore Pioneer sold ground that made Cheveron..-He couldn't get enough water for his cows-- I manage a piece of ground that was least for not much; then, for 3 yrs at $350; then $800 for 1 yr: $2500 with a drill clause.

I am just going to sit tight. I dont like the way this has gone and so I am doing nothing. When they come to my terms, I will then see about the amendments etc. For a small short term gain and increased taxes, I can wait.Im too far away to know who is drilling near by, if anyone.

As much as possible.