We just received an offer for an extension on a 5-year oil, gas/mineral rights lease for rights near the Rose Field area. The lease was originally issued in 2019 at $50 per acre with 3-years paid up front. Years 4 and 5 were $75 per acre paid annually. The company would like to extend the lease for an additional two years at $50 per acre. We would like to extend this existing lease for at least the same rate of $75. What is activity in this part of Kern County? What have been the rates for other lease extensions.?
Thank you.
For a more useful answer about activiy, you need to give the section, township and range. The offers are based upon competition. You can ask for the same amount, but given that gas prices have been very low recently, you may not get it.
Who is the oil company offering to extend?
Sounds like my lease near Wasco. Kern County
The property is in Waso, Sec 6 T27S R25E. California Resources Corp. (CRC) is leasing the rights.
I have been reading about CRC developing carbon capture and storage projects. Here is a link to an article about CRC :
Oil Gas and Mineral rights have been used for drilling and exploration. Are they now of value for these carbon capture and storage projects? Would these projects also have an impact on the amount paid for the mineral oil and gas rights per acre?
Hi Bruce: Carbon capture is a function of surface ownership. If CRC is seeking to extend an oil and gas lease it is likely not for carbon capture as, for the most part, the sequestration of carbon underground forestalls further oil and gas development in that area. In addition, an oil and gas lease requires production of oil or gas within a certain time period, typically 5 years.
On the pricing, all prices are down from 5 years ago. $50/acre is likely going rate but i defer to others in the area if they know.
Hope this helps.
I have a partner owner position (we own surface and minerals) in an 80A parcel in the Kern Co Cymric field. Some of my partner mineral interests are leased to Aera Energy.
the partnership was recently approached by Total in their attempt to establish a solar farm; however, Aera was able to block our project since Total said they needed a release from Aera to do their project. Although all of the surface owners were in favor, Aera blocked the project based on their holding mineral interest leases.
I am a surface owner but am not free to develop my surface as I see fit.
The mineral estate is generally dominant over the surface estate. In some cases, there are solar and wind farms that leave a portion of the surface acreage available for a drilling pad and the three energy types can all exist in harmony.