Leasing "middleman"

[daw]

Hi.

I’ve been reading the forum for the past 4 hours searching for information. First post here, so please forgive if I use this forum incorrectly.

My family collectively owns 100 gross acres of land and received the following lease offer:

T. 18S, R 25E, Section 24

$1,250 per net mineral acre 22.5% royalty 3 year primary term

Is this a good lease offer? The offer seems appears to be from a mineral rights group and they plan to partner with an operator to develop the lease. Would an operator typically offer a lease? Or is a middle person necessary?

Is there current drilling activity in this area?

Thanks.

[NMoilboy]

Hi

A lot of operators use some intermediary or holding company to do their leasing. I think its better to directly lease to the operator if its evident who the operator is, but, in NM the operator will likely be pretty tight on the bonus as they know they can just force pool you if you are unleased. So…shrug.

Here was some other info w.r.t. this area in another thread https://www.mineralrightsforum.com/t/spur-energy-update/

There is no drilling near there right now, but if you look at the Yeso trend map in the other thread that whole area is (slowly) getting developed. There are two rigs working Yeso further East. Will it happen for you in 3 years? Maybe. Maybe not. I’d guess odds are probably not. If it doesn’t you just lease again. Might as well start the clock ticking now.

That seems like a decent offer based on what I recall hearing from other folks. Leases and rules and non-numbers (i.e. words) aren’t my thing. If you own enough acreage you probably want to spend the $500 having a professional look at it for an hour or two.

[daw]

Hi NMoilboy.

Thanks for responding! I’ve read lots of threads that you have replied to and yes, I know about the Yeso development.

There are actually 3 wells in Section 24.

1. The Fasken (operator), Brown-Yates (lease name) gas well did quite well back in the early 1970s.
2. The Reading & Bates (operator), LINCK (lease name) gas well was plugged and then reworked by Morexco in 1999 and seems to be still producing.
3. The Yates (operator), Mobil (lease name) oil well was almost a non producing and plugged.

The middleman has changed the offer to be:

$1,000 per net mineral acrea, 25% royalty, 3 year primary term.

I’m wondering if they want to rework the Fasken/Brown-Yates gas well or drill a new well. Probably no way to find out except to ask them.

Thanks again for the reply!

[NMoilboy]

I can’t imagine it is for anything other than speculative Yeso hz development. Other stuff doesn’t move needle