I received an offer for mineral 3+2 year lease. 1/5 royalty seems fare but what should I expect on the bonus/acre?
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Where are you located or more appropriately, where is your property located.
Thanks
East side of 2211 off 77. They’ve started a large fracking operation near by.
Thanks! That seems to be a great area to own minerals these days, especially since the gas prices have jumped up by 30-40% over the past year or so. Just wanted to get a handle on where your are located to see what is going on. I am located about 20 miles West of you in SW Fayette and out of this gas play. For now, it is kinda dead in our area, so no new lease information to share, other than my opinion; but, IMO, unless you have an over abundance of experience and information, don’t try to do this without some help. Personally, I don’t even like the thought of a 3/2 lease. Much prefer a straight 3 year lease.
Thanks and Good Luck.
Thanks. I’m holding my cards close.
How close is your property to Schulenburg?
It’s less than 30 miles
I don’t want to hijack this thread about leasing, but I’m having a hard time figuring out where you’re talking about the fracking. I think this is what David21 is alluding to. To those of us around SBG, we all consider ‘southern Fayette county’ to end somewhere around the Swiss Alp dance hall, but I know that’s probably a matter of perspective since La Grange is actually in the center of the county. In addition I’ve burned up Google Maps looking for the 2211 that you refer to and I can’t find it anywhere.
So will you be a bit more specific about where this fracking is located? Anything north of Swiss Alp might as well be on Mars so we don’t want to get our hopes up for no reason. Thanks.
I’m sorry it’s 221 not 2211 and I was also wrong on my compass directions. The location would be the North West corner of Fayette county. 221 is also called Teinert Rd, road 221 comes off of 77 about 5 miles North of 290 outside of Giddings. The fracking location is about 200 yards east of 221 and on the south side of 222. The Fracking operation drilling site would be in Lee county. But they are drilling the horizontal well south into Fayette.
Alrighty then. Farther than Mars. Thanks for the clarification.
Well said! As for the help it gives us, around SBG and Flatonia or Cistern, this might as well be Mars.
I should have opened my map up first. I drive to the property every couple of weeks but over time forgot the names of roads and directions. I’m sorry for the confusion. I’m still trying to find anyone else who has recently received lease offers in Fayette. Anyone?
Wayne: Don’t know if you are a newbie to this leasing game or not; but, if you don’t get any helpful responses, I would suggest talking to a local attorney. They usually have all or most of the good information. If you don’t have a local attorney that you trust, I recommend calling the Flatonia attorney. He does lots of leases, is familiar and usually stays on top of the latest lease language and lease offering. Call Mike Steinhauser, 361-865-2540
Thanks for the information. I’ll be checking with someone real soon.
3 is better than 3 +2 but not a deal breaker make sure bonus for yrs 4&5 is adequate at least the same as 3year bonus. They will give you 25% royalty (it’s common now) if you ask. Do that. Signing bonus depends an nearby completions. It sounds like you need to ask for at least $250 per acre maybe more. Ask what others are being paid and increase by 25%.
Thanks. The latest offer is for 22.5% Royalty and $500 signing bonus for a 3-2 year lease. Myself and several neighbors are dealing with two different companies to work for the best deal.
Wayne: I’m sure you will get some excellent information from some of the other folks; but, just for information purposes. Is the $500 initial signing bonus for the first three years and is there an additional $500 for the remaining two years if they decide to pick that up?
That’s $500 per acre one time. I’m getting offered 22.5% Royalty now. I’m still looking for 25%.
One time $500 for a 3/2???
Hold out for a 25% RI for the lease. The $500 seems ok but make sure to charge them for the 2 year option maybe $400 (that is more than you are getting now - annualized) … They would pay the $400 if and when the wanted to extend the lease. An option is always good for the operator, but its very common. If you own the surface there is language you need them to agree on up front and in a lease there are several things that will be important to you or your kids. Get a good Oil and Gas lawyer to help you right it, preferable someone with a lot of experience in the area. Good Luck.