Lease offer from Double Eagle Developement

Got an offer from Double Eagle to lease acreage in Block 49-A and 53-A PSL for $150. per net mineral acre with a 1/5 royalty. There are no operating wells in the immediate vicinity. Does anyone have any experience with what offers have been for that area?

Thanks for your help!

Hi Ms. Hardy, I don’t think lease terms are that localized - meaning that even though I can share terms received in Dawson Co, - it should be very pertinent and comparable to your Area in Andrews County. $300/Acre NOT net mineral acre bonus rate, and RI of 1/4. Shut -in Royalty and other terms such as lease time 3-years with no option to extend the lease, can re-negotiate after 3-yrs is one idea. There are many issues to consider that are almost as important as the bonus and royalty. For example, many leases say the royalty owner shall pay for lifting, transporting, pressurizing the product from their wells! I believe that the oil company should pay those costs. It’s like somebody leasing a car from you and them wanting you to pay for their gas they use as part of their job!!! This knocks close to one quarter out of any royalty checks! So above all contact an O&G Attorney and/or Minerals Manager - it’s well worth it.



Good advice from Ralphr. According to the most recent Lease Price Report (Lierle Public Relations), the most common lease bonus in Andrews County (Nov/Dec 2012) was $850 per acre. My experience last year, in Block A33 the offer started at $300/acre and ended at $650.

Ms. Hardy,

Who is the Landman for Double Eagle that you are dealing with? I have interests in Block A-47, Sections 9 and 10 that they are trying to lease.

Mr. Scotty,

Most of the activity (# of wells) seem to be around the city of Andrews and east. Moving west the activity becomes sparse. Does your lease data differentiate. Ms. Hardy and I have interests that are west of most existing wells.

Thanks to all who replied and for the great information. The Landman is Julie Lundeen from Lundeen & Associates who is a contractor for Double Eagle. Last year Round Rock Energy paid a bonus of $400. per net mineral acre and RI 0f 1/4 on a 3 year lease for a section in Block A-53 PSL. Lease Price Report sounds invaluable. Thanks for the reference. Will start negotiations with Doubler Eagle and post the deal if we come to an agreement.