Leasing offers in Montague County

For what it's worth, my sister and I were recently approached by a fellow named Cliff Williams, an O&G attorney who together with an "engineer" (no name mentioned) is apparently interested in reworking old wells. His interest was in our tract:

"Mineral Interest BEING all of Block No. 171, of the John H. Belcher Subdivision of the Jose Olibarri Survey, Abstract 579, according to the recorded plat thereof, of record in Volume 9, Pages 638 and 639 of the Deed Records of Montague County, Texas."

The tract (160 net mineral acres) was originally leased in the early 1990's without a Pugh clause, and as a result was "held by production" of a single, low-production well until 2011. We finally got a release last year, after we requested the lessee to drill further wells or release everything except the single well. Since it was meanwhile non-productive, we got a complete release. After something over 25 years ;-(

At any rate, we were asked for our ideas regarding lease conditions and terms. We replied that "We do have specific ideas as to lease terms and wording - in particular, we would hesitate to sign a lease for this interest without a Pugh Clause/Freestone Rider, a rider specifying responsibility for any surface damage, wording excluding participation of the owner in production costs. We also are averse to any shut-in royalty clauses."

And as to terms, we noted that our "understanding is that a bonus of $ 800/ac and 20% royalty is presently being offered in Montague for a three-year primary term."

At that point, Mr. Williams thanked us and declared that our price was doubtless justified, but beyond his means, and also noted that the unplugged single well on the tract (which still remains to be plugged by the previous lessee) was a liability he didn't want to accept. No counter-offer was made.

The previous lessee assured us that he was willing and able to plug the well, and was willing to give us an indemnification that the well would be plugged at his cost.

So we are still waiting and interested in seeing how things develop in Montague County. There are already 3-4 old (plugged) wells on the tract, and we would be surprised if no further oil/gas could be obtained. given the willingness to drill new wells. At present, the L.E. Jones Production Company of Duncan, OK has an exclusive seismic permit for the tract until the end of February, 2013, but we have the contractual right to interpreted results of the geophysical operations (without cost or other encumbrance) for the benefit of prospective lessees.

Charles, I can't say it is the same person, but likely, there is a Cliff Williams TX OG attorney that posts on this site. You can enter his name in the search box in upper right corner to see his post activity. He has made many solid and helpful posts here, I can't say any more then that.

As far as being asked "what are your terms" this is a negotiating technique which gets you to speak first - which isn't the best position to be in especially since you aren't a savvy lessor and he (and others) should be considered savvy lessees. So I suggest you let interested parties make you an offer. You'll only want to consider things in writing and be sure to document all discussions you have with people as you explore your lease options, but no matter what always make sure what you do verbally is documented and conveyed in a leasing agreement (just don't get yourself in a position later where you are saying "but he said xxxx on the phone".

Now to me it is contradictory that Mr. Williams is interested in reworking old wells yet you later say he says that the unplugged well is a liability. However, I do not know anything about this and it may require complete closure of a pre-existing well with documentation and county registration as such before a new operation (rework) could be undertaken. but again, I have no idea.

Regardless, you better investigate that issue (plugging old well) because it is something you may need to address to permit you to negotiate a new mineral lease with any company moving forward. Others on this board can probably speak to that.

Good luck. I have posted elsewhere my ideas about what to do when trying to lease. Be cautious, be thorough and take your time.


Similiar out-of-the-blue offer on North Montague County, TX property that once had a lease - payments stopped long ago. Assume expired. See my post - new thread.

Thanks for the helpful comments - here just an update. In the meantime, the old well has been plugged, the old lease is void and my sister and I now have 160 mineral acres south of Nocona free and clear for any lease offers that might arrive. We have no hurry, and can wait for a good offer. And the best part of this is that we have enough acreage that we can actually negotiate a lease rather than having to accept any terms a potential lessee might want. We had very bad experience in west Texas (Reeves County) trying to negotiate a lease for some small interests - apparently scared off all the potential lessees - and hope for better luck in Montague.

I just received a lease offer from West Bay Exploration Company out of Michigan of all places for acreage in the R. Graves Survey (256 acres) and the A. Cervantes Survey (330 acres). The mineral rights from Montague County have been passed down several generations and split more times than I can count. I personally don't even know what my interest is in these surveys are.

The offer was $100.00 3 year 1/6 royalty. This offer initially comes across to me as extremely low. Now I have no idea what others are getting in Montague county so I came here to compare. Has anyone else received a lease offer in these surveys or from West Bay Exploration?

we inked a One-Fourth Royalty (1/4th) and $800.00/mineral acre for 3 years. Jan. 2013 (Pioneer)

for land in Nocona, TX. Talk to a good oil lease lawyer before you ink anything. Be patient.

I will supply lawyer's name (from this county in TX) upon e-mail request. He was well worth what I paid him.

Pat, I'm interested but am not at all happy about the way our "Facebook kiddies" forum managers have changed the way we send emails to one another. When I want to send someone an email, that's all I want. I don't want to have to set up a childish "Friends" account just to do that.

You can contact me at "kewlo at web.de" (no quotation marks or spaces and an "at" sign (@) instead of the word - I do this to prevent robot data mining), which is a "throwaway" account I use until the spam gets too heavy.

It used to be straightforward to contact other forum participants by email, but unfortunately this has been changed.

A relative of mine just received a lease offer on mineral interests NE of Bowie, in the general vicinity of Allison and Upper Montague Roads. Could I get several of your opinions on what would be a reasonable lease bonus per mineral acre in that vicinity?

send you an e-mail to your inbox on this site. thanks.

there are some shills posing as mineral experts on this site. They seem to like to collect your info on your wells and what was offered to you. Then you never hear from them again. Beware! I called a local lawyer in Pa, and he gave me a lawyer in upstate Pa who was a mineral lawyer in an area where people are making 30-50k a month on their leases (lucky them), and he referred me to a mineral lawyer in TX in this county. The real McCoy not someone who really has no idea, or is retired, or busy with a wedding etc. And we did run into this from a posted recommendation on this site. Perhaps it was just an anomoly and perhaps it wasn't. I have better things to do with my time. Bet you do too!