Lease signed with BHP Billiton Petroleum Co for 5000.00 pnma 9-2016

Hi everyone,

Just to keep everyone informed of lease bonuses in Reeves County I wanted to post that we signed with BHP Billiton in September the following land:

W/2 of the E/2 of Section 28, Block 57, Township 2, Abstract 6029 T & P RR ℅. Survey, Reeves County, Tx. 13.3333 nma owned.

The terms are three year, ¼ royalty, 5000.00 per net mineral acre.

Original terms offered were three years with a two year extension, ¼ royalty, 3000.00 pnma.

The lease is and minerals are a minerals classified by the State of Texas so we used a State of Texas lease which covers about everything wanted by a lessor.

A minerals classified lands means we are owners of the soil and the State of Texas is owner of the minerals…thus we and Texas split 50/50 the lease bonus and royalty in event of production.

Not a bad deal at all I’d say!

Rick -- thanks for keeping us up to date and good luck... Happy New Year everyone! Later -- Buzz

How does the two year extension affect the bonus? Do they pay you another bonus if you extend the lease?

Brenda -- generally, exercising an option to extend a lease requires the payment of the same bonus... or more. Later -- Buzz

GLO used to allow an extension which was classified on lease form as delay rental. So bonus was paid upfront for 3 years and then additional payment was paid as delay rental for two additional years. Most commonly this was same per acre as original bonus. West Texas is now so hot that bonus rates have risen steeply. So current GLO policy is strictly a 3 year lease term with no option to extend. Instead an entirely new lease mustbe negotiated at current bonus rates. This is something for mineral owners to keep in mind when negotiating leases on their fee minerals.

TennisDaze -- very good points... as usual, I might add. Later -- Buzz

Hey I have a question regarding this lease that was signed last year. BP Billington wants my approval to build a road to a well site they are planning on drilling soon on section 28 the w/2 of the e/2 where I own a surface interest. My question is what am I entitled to from BP as they are asking my permission to build this road. Do I ask for more money, A higher percentage royalty??? Etc. what are my rights and why are they contacting me? I own 13.33 acres in this section. Are other surface owners notified and asked to agree as well? Thanks for your time.


Targa sent a packet with a permanent easement ROW agreement. They are offering a one time flat fee of approximately 7600.00. Is there a way to get a piece if whatever flows in the pipeline they are about to do? What options do I have, if any.

also, BHP Billington iso offering approximately 22k for a well pad and a field pad.

Anyone know what the going rates for easements, and well pads are going for?



You should ask for surface damage payments. On a40 acre piece we are part owners in Oxy paid around $17 for surface damages 3 years ago.

I received the same offers and look forward to the answers!

Rick..I was introduced to the University of Texas Lands fee schedule which is public knowledge and on the web. Targa was amenable to the U T numbers. Now talking to BH P about the well pad issue.

I am am also in the tract you reference!

Hello Anna...yes I see your name in the packet Targa (Grand Prix pipeline) sent. I'm going to friend you so we can message one another on this deal. Nice to meet you.


I can't Private Message you until you accept my friend request Anna...

The University Of Texas Lands Fee Schedule sure is informative. Thanks, Anna.


Yes, the lease bonus would be the same for the extension that you received for the primary term. But, the extension is at their option, not yours. Therefore, having the extension language in your lease is a benefit to the lessee, but it provides no value at all to you. The lease rates when the primary term is ended will determine whether the lessee extends the lease or not. For example, if rates have doubled, the lessee would extend. If rates dropped, extension is unlikely. The decision is not in your hands.