Our family has received a lease offer of 400 an acre and 20%. We own 80 gross and 80 net together and are all going to sign the same terms. Our past leases have been 25% royalty. We are in Section 29 T15S R37E. This seems low so I would like some input and any activity in the area.
Depends on who the offer was from.
The Permian Basin is 25%. Counter with double the bonus and hope for something close.
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Matador Resources is who the offer was from. The last lease we had was 600 and 25% about 8 years ago.
Maybe…depends on where you are. There are areas of the Permian that have little to no value. Some of us think we are all sitting on gold mines, but lack of wells in an area or lack of competition may dictate otherwise. I’d rather lease to a competent operator for a little less, as oppose to missing out completely or getting force pooled. I’ve been the guy that held out for a lot more, then completely lost out. 1/4 of 0 well is still 0, according to my math. With that said, if I’m in tier 1 acreage, and neighbors are getting 1/4, then yes I want my 1/4.
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Hello. Have you came up with a counter offer yet? I had seen that with a three-year lease and a three-year option
Not yet, we are waiting on a lease draft from them to look at all the terms. They said it might be 2 weeks to get out to us because they need approval for our section now. Time will tell.
I received the same offer. I was also wondering if this is a good offer
Who was your offer from and were are you located? We are sec 29 15S 37E.
Matador Resources are the ones who made the offer
Lots 13,14,15, 16 section 2
Same offer from Matador $400 3yr/3yr 20% I asked the landman for 25% nope asked for 22% nope Said they would go $500. 15s 36E sec 29 220 gross 18 net Landman told me this is a horizontal well covering 2 full sections with 1 1/2 miles of horseshoe shape well.
As a small interest in 1280 acres do I have any leverage to negotiate price or clauses? Is there a point to having an attorney review the offer. I’m new to this but it looks like you either take it or wind up in the forced pool….? Any help would be greatly appreciate.
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I have an offer of $3000/nma with 1/4 from MRC, the location is T25S R36E SEC 10 W2 NMPM. I don’t have the check yet so I have to emphasize that this is a work in process. They have accepted my lease so I think it is just a matter of time. I am an owner of minerals recently purchased by MRC from Ameredev and they seem to be OK. Royalty checks coming in a timely manor
I know a guy that held out for 25% royalty twice, and both times he was force pooled. His royalty from that is 1/8. Keep that in mind when negotiating. Royalty negotiation is easier when there’s multiple companies battling over land. But if there’s only one or two, then your leverage is low. Just my two cents.
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Is forced pooling a thing in New Mexico?
Yes. If you’re force pooled, it’s my understanding you get 1/8 royalty. I know a guy forced pooled twice because he held out for 1/4 royalty both times.
That is not wholly accurate. The unleased mineral owner is paid a deemed 1/8 royalty until payout. The mineral owner’s remaining 7/8 is treated as working interest with costs offsetting revenues until recovery of all drilling and operating costs plus risk penalty set by NMOCD. After payout, the mineral owner receives the revenues on all 8/8 subject to the operating costs. Here is an article - https://www.steptoe-johnson.com/wp-content/uploads/2023/06/Allocation-Wells_Mid-Con-Webcast-Series-Slides.pdf
Here’s the excerp from act: If the interest of any owner or owners of any unleased mineral interest is pooled by virtue of this act, seven-eighths of such interest shall be considered as a working interest and one-eighth shall be considered a royalty interest, and he shall in all events be paid one-eighth of all production from the unit and creditable to his interest.
You can find this at:
2024 New Mexico Statutes Chapter 70 - Oil and Gas Article 2 - Oil Conservation Commission; Division; Section 70-2-17 - Equitable allocation of allowable production; pooling; spacing. Universal Citation: NM Stat § 70-2-17 (2024)
Thanks. I’d still rather lease for 1/5 royalty if that’s my only option and not risk being force pooled. I want the royalty on the big initial production. What if the well takes 5 years to reach payout, or never reaches payout? 1/8 royalty would stink in that event. It’s all about competition and potential production. In tier 1 areas with multiple big operators, then yea I might take a chance, but in step out areas, I’m not risking being force pooled just because some dude on mineral forum told me to hold out for a 1/4. He’s not in my shoes, nor does he know how many offers (or lack thereof) I’m getting. Thats my view.