Leasing Options/Questions in Dimmit County

Oil and Gas Leasing Help
1

Looking for any help on Eagle Ford Shale, Dimmit County rates as we begin negotiations on an Oil/Gas Lease.

First offer is from Rosetta Resources (which I have found some info on through google search) for $500/acre for 10 acres bonus payment and 20% royalties for a 3 year lease. This seems a little low and we are wanting to be patient and know what ballpark we are in. Our land is right off of US 83 in Dimmit County, about 1 mile N of Catarina. We also have a SWD plant that will begin operation in June-August this year providing permits and construction go as planned.

Not sure what value any of that adds to our bargaining power and how a smaller plot affects that as well. Also wanted to know about pooling and what current drilling units are... last I heard was 320 acres per drilling unit?

I am not Texas native, but have done several months of research now, so I know some things, but still have my limitations!

Thanks for any valuable discussion/input on company, pricing, and advice... If you want to correspond privately, please send a private message or email me at pjwinrevival@aol.com .

Thank you for your consideration...

Jeff Bullard

Winchester, IN

2

Jeff:

I'm not for sure about the $500/acre bonus for your area but the 20% royalty and 3 year lease sounds good. You might want to research other contents for your lease such as "Pugh" clauses, etc.

3

Thank you Charles... I will look for that.

We have a O & G Attorney we have worked with on SWD, so we will be getting in touch with him to help us with that info as well!

I don't believe the offer is terribly low however, I have seen reason to believe it could be better...

Thanks for your input!

4

Is this still the going rate in Dimmit County? I have 1.39 acres and have been offered $500 acre/3 years with a right to extend for another 2 years. And 25%.