I have production on some wells in sec 21 c17 in reeves co… I am getting offers to lease my acres below the wolfcamp in same section. They only offer 150 per acre. Could someone give me some guidance on leasing below the wolfcamp.
Lease for $150 per acre? Not even close.
With gas prices at $8.00 plus,you would think companies would be more aggressive with drilling programs.Some can remember the 60s and 70s with rigs being built on site on a concrete slab and 8 Ft cellar. Drilling could easily be a year.Twenty K feet was common.The rewards we’re not assured but mostly were. Can the rigs used today reach these depths? Maybe the risks out weigh a good outcome considering the expense of drilling, product, and transporting. Again ,thanks to the forum. Cj
Since they want to lease below wolfcamp, then what would be a fair price.
Your current lease is Pughed out below the Wolfcamp? You got an offer, or you are getting offers…plural? From…whom?
Headscratcher. I cannot imagine what is going on that somebody would drill Devonian/Penn wells in the next 3 years in far eastern C17. I’d say a fair price is anything that would be willing to pay you. Rank wildcat goat pasture pricing (e.g. something like $150). You can’t really lose. Very very very high likelihood that nothing happens and you made a few bucks. Or something happens out of the blue and you make way more bucks. Shrug.
Thanks for eloquently explaining the situation I had made a feeble attempt at. Goes back to the bird , hand and bush fable.I would almost pay someone to stand a rig up on my tumble weed farm. The offer was 3/4 of the original price l paid in 98. I took the liberty of enlarging your picture.Looks like a future soccer star. Cj
We just received what might be the same offer. $150.00, for 3 yrs. We countered with a higher offer for 1 year. we’ll see what happens. Like the “bird-in-the-hand” idea though. All the best to our Mineral Rights contributors. Navgoat
Most leases are for 3 years - What higher offer did you go with to counter?
I personally would hold out until I get interest from several companies. Then, I would start at $5K per ima for 3 years, no Extension and 25% royalties. A lot can happen in the next year, Wait until it gets hot with multiple offers, Otherwise, if you settle for next to nothing, you are allowing a company to tie up your property for years.
Yep, good to be the guy leased with a rig on location. Thanks, pic is my son, he is at least ok enough at the soccer that I’m not getting a $75k/yr bill for college.
IMO “below the (base of the) Wolfcamp” is like telling you that you can have all of Bill Gate’s money…in the cup holder of the golf cart that he sometimes drives on his estate in Montana. It might be worth non-zero, but it ain’t the good stuff. It’s not negotiating a lease in prime Reeves.
It’s better to lease for a decent Bonus ($4K or higher) IMO. Otherwise, don’t sign a Lease.
That would be my thoughts exactly. We’d never take a lease below the wolfcamp, as with most companies, so I think I’d push for a deal to happen.
Similar situation for bonus levels in shallow Delaware formations. Bonuses are far lower because production and returns for shallow vertical wells are less. High bonus for horizontal wells in Bone Spring and Wolfcamp formations in oil areas, and lesser bonus for ‘gassy’ areas, even in same county. Got to understand the factors for both your location of minerals and the formation. At the same time, be sure that an offer for depths below base of Wolfcamp includes a stratigraphic equivalent definition. And review depth release in original lease - was it a formation base or set number of feet below depth drilled? If the latter, maybe lower Wolfcamp, perhaps C and D, is open. Wolfcamp covers a lot of depth feet in many areas.
@John19 What did you guys end up leasing for? Received the same lease offer for same section and depths. Said they are offering between $150-$300 per acre
I assume the target is the Woodford. Anyone else getting lease offers for rights below Wolfcamp?
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