In Cochran County as by region, lease bonuses may vary from what we are familiar with for example in the Barnett Shale for gas drilling. We have leased from 2500 / acre to 5000 / acre with 1/4 production benefit. We have an offer on the table in Cochran for 175 / acre and 1/5 production benefit minus their expenses. From my experience, $175 / acre is way off base. Does anyone have input for us and thank you...
Kim,
You might want to join the Cochran County Texas Group and ask your question to the Members there. Here is a link if you would like to join: http://www.mineralrightsforum.com/group/cochran-county-tx-oil-gas
And welcome to the Mineral Rights Forum. Good luck with your leasing.
Clint Liles
I know of some people that are only getting small amounts per acre for the lease but getting 1/4 to 3/8 royalty for properties in which the prospect is known and drilling is imminent (to be drilled within 6 months). For wildcat situations, it is more typical to get $100/acre lease and 3/16 royalty and the property may or may not get drilled anytime soon... Minus their expenses should be looked at carefully, but may be OK if that does not include well drilling and completion costs. The key to knowing if you have a good deal is knowing the proximity of your property to known/proven production. It is all about relative risk. Plus terms of the lease... length of time (3 years with an option to extend for more $ and any mention of when they intend to drill. Sometimes they offer low lease rates just to tie up the land for a while in the event a nearby discovery is made.
Joel,
Sorry for the delayed reply...thank you for the input...i have been considering the deal...drilling is active on acreage adjacent to...the player is out of Irving, Silverspur and known to have some cash capital so going to make it compelling as possible. No one on the blog has yet stepped up to commit #'s which i had hoped for so along with an eminent 1 yr deal with no auto renewal, .50/barrel damages, no dumping, assigned ingress egress, driller incurs production cost...bonus still under consideration w/ 3/8 royalty and see what happens.
Thank you again...any further input is most certainly welcome...