Lease Offers in Hockley County, Tx

It’s clear that all the new shale leasing activity that has been sweeping through Terry County (and other surrounding counties) has hit southern Hockley County. I’m aware of leasing activity in the Arnett area along highway 1585. Initial offers on lease terms that I have seen are 1/5 royalty, $300/acre for 3 year term, $200/acre for 2 year extension. One of the companies involved is Plantation Operating, LLC, out of Houston. An addendum to the lease protecting the drip irrigation systems and pivot irrigation systems is being offered. Please share your experiences in Hockley County.

I was offered a bit less in the first contact made by a company called Matador Land Services - there’s next to nothing about this company anywhere, so I’m skeptical about working with them. I have NO experience with this and am trying to research as much as possible by joining this forum. Thanks for any insights you might have - my property is on the Lubbock/Hockley line.

Matador is out of Midland, but I don't know anything in particular. However, the thing to remember is that it is very common for the larger companies to utilize various land services like this; they are basically contracting a group of landmen to buy up leases. Then, at some later point, the leases will be assigned back to the larger company. Matador most certainly will not be drilling any wells, and there is no way they will tell you who they are working for. And in the end, you can never be sure who will end up with a lease, as leases can be traded, assigned, and sold.

If you want to lease, make sure you counter their offer with what you want. This includes bonus, royalty, and especially an addendum with various terms and protections. If you own the land as a farmer as well, you will want to be especially careful to include terms that will protect your fresh water usage and your irrigation systems, if you have them. There's nothing quite so bad as a big pump jack in the middle of a pivot irrigation system.

I would be curious how far your property is from the southern border of Lubbock/Hockley county? Seems like most of the activity is coming up from the south, and a spillover from all the leasing that has spread up through Dawson and Terry and Lynn counties, among others.

Stryker Travis said:

I was offered a bit less in the first contact made by a company called Matador Land Services - there's next to nothing about this company anywhere, so I'm skeptical about working with them. I have NO experience with this and am trying to research as much as possible by joining this forum. Thanks for any insights you might have - my property is on the Lubbock/Hockley line.

Thanks so much for your reply. Today, they left a message that their offer is only good for another week. Should I be suspicious of this company because they have no web presence? Our property is just off 82.

Many of them don't have a web presence. In this situation, a good lease is a good lease. Personally, I would see what they are willing to do.

Well, today they say that there will be no negotiating, and no changes to the contracts because they are no longer going to offer more contracts for the time being and they can do without my land. They DID tell me that their client is Concho Resources, and that they are a mere subcontractor who writes the lease, but I replied, “but my research shows me that the same person owns Matador as owns Concho, so the distinction is really on paper, correct?” (Crickets to that.) I asked for the lease and now need to find someone to look it over - he didn’t know what I meant by a clause to prevent drill and run, and said the warranty of the deed is standard … no changes. Two months ago I knew nothing about this, but now that I’ve explored this a bit, I’m keen to do it . . . and now I’m a bit dismayed by this development. Perhaps I’m just overly cautious. Thanks for your thoughts.

Well, that doesn't sound good. I personally would not sign a lease without at least a proper "addendum" to the lease.

You do have the option to say NO, and wait. There are several companies that are working the general area.

After my initial offer, I have now had a second company contact me about leasing our minerals. Both were willing to negotiate terms, and both are agreeable to an addendum. This second company tried to lease our land a couple of years ago with a "no negotiating" posture, and I said "no".

Sometimes these groups will canvass a big area to get the "easy pickings". I can't guarantee you will get a second chance with another company, but there is a reasonable chance you will.

Thanks for your perspective, JW. I'm glad to hear that I'm not just being paranoid. They did contact me months ago, but I thought it was just junk mail. They say they WOULD have negotiated then, but not now. I'll have to find someone to look over the lease to see if it's at least good as it stands. The offer is on the lowest end of what I'm finding on this forum ($250/acre 20%). If I wanted to approach another company, is it proper protocol to just email them, or would a more sophisticated approach be in order? Or should I just let them come to me? It's a bit of a wooing dance, isn't it?

Also - he is providing a surface agreement since we have a tenant farmer.

There is a "listings" section on this forum if you are comfortable posting this as "available to lease". Look at the bottom of the home page.

I've contacted companies before on other properties, especially when I already had an offer, and that worked out really well. I told them I had an offer (didn't tell them what it was), and that they would need to beat on. On their first take, they didn't beat it. I gave them another chance, and they upped it considerably. It's good old fashioned horse trading.

In this case, knowing the names of companies doing the leasing may be the problem. If you look through this forum, especially Terry County and maybe Lynn County, you will encounter some names of companies that are leasing in this general area. Most of them are interested in the "Wolfberry".

Another way to find who is leasing in your area is to look through the records of the Lubbock County clerk's office. You would be looking for oil and gas leases that have been recorded recently near your part of the county. This can possibly be done online through "Texas File": http://texasfile.com/texas-land-records-coverage/#county_coverage

Good luck.

JW - thanks for these insights and recommendations. I’m disconcerted to see that Hockley County is not listed at this link! How can THAT be???

I emailed Texas File about the lack of Hockley County information and here is their reply: “Unfortunately, we do not have access to Hockley County at this time. We hope to get it online sometime next year. We will keep you posted! Thanks!” Mercy. Well, we are right at the lower corners of Hockley and Lubbock counties, so the result from the three bordering counties should also be informative. Many thanks.

Hello All,

I have visited this group many times in the last two months, awaiting some new development, but all is the same. This discussion about new leases and drilling in your county begins with so much hope and optimism and then there is an end to the conversation. What is happening there in Hockley County?

I found deeds to oil buried deep in my Mother's closet. I found them because she is in foreclosure and needs to clear out her house. She thought they were worthless.

Both of us (especially my Mom) would love to know how things are progressing there in Hockley County.

I wish we could get some more input from other members. I leased 3 farms in the southern part of the county, but they were not interested in land from Levelland north. However, other companies might be going farther north. It would be interesting to see what others have done.

Liz B said:

Hello All,

I have visited this group many times in the last two months, awaiting some new development, but all is the same. This discussion about new leases and drilling in your county begins with so much hope and optimism and then there is an end to the conversation. What is happening there in Hockley County?

I found deeds to oil buried deep in my Mother's closet. I found them because she is in foreclosure and needs to clear out her house. She thought they were worthless.

Both of us (especially my Mom) would love to know how things are progressing there in Hockley County.

My land is on the border of Hockley and Lubbock counties, and I’ve had four different landmen show interest by making offers. I put the whole thing in the hands of an attorney out of Brownfield about two months ago. Guess I need to check in and see how it’s going. If or WHEN it all comes together, I’ll post the results to save you guys some steps.

Thanks! That is good to hear about landmen poking around. Also, please let us know how close to the southern border your land is. My interests are on the border of Hockley and Lamb. Too far north!

I have been told told that Concho will drill 5 or 6 wells in Hockley County and is drilling one right now, not sure where. Has anyone heard of Anthem Oil & Gas Co. (AOG) trying to buy mineral interests in Hockley County?

If so, how much are they offering. My brother received a letter regarding this and asked me to check it out.

Would appreciate any information re: either one of the two above subjects.

Bob Myers

Tyler, Texas

I get offers all the time from Anthem (out of Midland), but so far only on PRODUCING royalties. I own several scattered mineral interests in Hockley County, some recently leased for Concho, but have had no offers on non-producing property. Concho is doing a well in nearby Terry County, but I haven't heard of one in Hockley yet. If anyone knows of their first Hockley well, that would be of interest.

Received a Ft. Worth- based land man call on mineral acreage just outside Levelland on the Sundown Highway. Offer was 20%- 5yr-$300. After a little discussion the offer changed to 25%-3yr.-$300. This man claimed to represent the actual operating company and not a flipper. Also claimed the company had intentions to do a horizontal drill. Sure. Said we could use our own lease agreement if desired. What is anybody seeing or hearing on current cash for 25% leases? Only 45 acres involved. Is there much interest in Hockley for horizontal?

It depends on the part of the county, to be sure. Yes, quite a lot of interest in horizontal drilling.

I recently got $300/25% in one location, but have seen $450 in other areas.

Thanks for the prompt reply JW.

Landman is offering 25% & $100/year, so may go ahead and pull the trigger. Claims it's a huge operator with deep pockets ready to spend. I need to research a bit and find production records on horizontal wells in the area. I looked last year and couldn't find any records but I saw the Terry activity but not production. Horizontal would seem like a natural for Hockley with so many tight shales in the area, IMO.

JW, noticed you had some Oklahoma also, not Grady County by chance?