Lease Offer Dawson County Taylor County School Lands

Apparently there was a previous lease that I did not sign and there is money owed to me also.

Trying to muddle my way through all this your help would be most welcome.

Can you give me an example of what you are talking about? Sorry to be dense I assume you are speaking of a clause that excludes actions on one part of the lease? Not sure I follow.

If it were me, I would lease the two tracts independently. Just insist on it. You do not want them tied together. They can have identical leases.

Thank you for your reply

I am thinking in the following manner as far as a counter offer is concerned.

Separate lease per each property

No Pooling

3 Years

No Option to extend

$600 per acre

25% royalty

If any of you are following this and have an opinion on this please reply.

I also am not clear on how to calculate mineral acres.

Thank you in advance for your input.

@Ronnie_L_Jones, who is this lease offer from? CGS? If CGS, then you can likely get $550-700/NMA with a 22.5% royalty.

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Thank you very much for your reply

working on a few details

currently $600 and 22,5%

@Ronnie_L_Jones, be sure to push for a 25% royalty. A lot of brokers out there with no plans on drilling so the higher royalty helps you out in the long run when an operator does come along to develop.

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I agree with Oilman30. I always advise to push for 25% royalty. Whether bonus or royalty always go over the top and let them try to negotiate you down. If they are truly interested they do their best to work with you whether they act like it or not.

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our family also has leased land to cgs operating in the munger subdivision of taylor count school land. we leased out 244 acres. when i spoke to the man on the phone he informed me that 600 acres where needed to create a unit before any drilling would begin is this the industry standard. if so how can i find out if my neighbors have leased there land also

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This funded on the 13th 600 and 22.5%

sorry for the delay yes

They did not agree to this and stated that “It would be useless as singlel units.”

CGS is representing EOG. They can afford the 25% royalty. If they refuse then be adamant about two units in order to receive two bonus payments. Be wary of other offers as CGS is the only legitimate group leasing in that part of Dawson and Gaines Counties. The rest are just flippers looking to make a quick buck with zero intention of ever personally drilling your land.

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Oilman30, Any idea what is Oxy doing with the tens of thousands of acres of minerals it has leased in Gaines county? Has the acquisition of Anadarko stalled Oxy’s development plans in Gaines county?

I’m not sure what their plans are in Gaines County. I do know that they have significantly slowed down their drilling schedule in the Delaware Basin since the acquisition. They now have to sift through and compare their OXY position with the newly added Anadarko position and determine what is best to drill first. Expect OXY to be slow in newer areas for them like Gaines. My guess is they will focus on their southern acreage more and/or focus on their Delaware acreage once some of the parent/child well issues have been sorted out.

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I think the Gaines county stuff is under a different division [Permian Resources?]. Oxy bought Hess’ interest in a Gaines county field for $600 million, but additionally leased in areas with no existing production for what may be an unconventional EOR [Clearfork?] prospect which might employ experimental dual function injector-producer wells from what I have been able to gather.

I have another question that somebody might be able to answer. Do I receive mineral rights for all oil being pulled out of league 4 of the Taylor School Land in Dawson County? How far can oil be pulled out from operating wells?

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Bobby,

Depends on the size of the unit. If you are pooled into a large unit then that will be the basis for your payment. (Also will reduce your % ownership in the unit.) If you wanted a straight answer, you will get paid for the oil that is directly under the property that you lease thus the 244 acres of land covers your interest in the oil. Next step is to determine the % of ownership of that 244 then you can adjust what interest you will be paid if they make a 600 acre unit.

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Hi there - Sorry to bother but I have been reading along with this thread, trying to get some insight for myself. I know 0 about mineral rights, and even less about anything to do with oil. I am a peanut man and know the business inside and out but when it comes to land, leasing, etc - I am in the dark.

To get to the point - I have been approached about some land in Dawson county i was unaware I even hold mineral right to (through my grandfather). To be exact it is 78 acres, East Half (E/2) of the North West Quarter (NW/4) of Section 4, Block 36, Township 5 North, T. & P. Railway Company Survey, A-458, Dawson County, Texas.

The offer from CGS is $650 per net mineral acre for three years. This is a PAID UP LEASE with no obilgation to actually commence any operations during the primary term. Then there is a provision to extend the primary term at any time for an additional 3 years by paying 650 per net mineral acre. Royalties offered are @ 22.5% of the produced.

Anyway - sorry if that is a lot of un-necessary detail. I’m just trying to find a knowledgeable individual who can offer some insgiht into “if this is a good deal” and/or “what can I reasonably expect from this offer.” Also - should i be concerned with any kind of liability?

Any and all information you are willing to divulge is greatly greatly appreciated. I know this is absolutely not your responsibility so I hate to even bother by asking, but I certainly have no idea where to start or who I should be asking .

thank you for your time. - cvs