Montague Co Lease

I have a client who is being offered a very small lease bonus a a 3/16 royalty in abstract 795 in Mongtague County. Is 3/16 the going rate, or could she get 1/4? What are bonus rates?

What state? Better to post it in that location.

Montague County is in Texas.

I am a Landman who lives in Montague County, do you know if they are wanting to drill a conventional well or are they targeting the Barnett Shale with a horizontal well?

5 years ago before the oil price crash and companies were still drilling horizontal wells in the Barnett Shale the bonus with mineral owners who could negotiate it would run anywhere $500 to $1000. Of course this has changed and there has been no new horizontal activity or significant leasing since that time.

As a Landman and a mineral owner(I actually have some gas unit royalties in the East 100 acres in that survey) it is an adjustment on both sides. Conventional well drillers that I have worked with will usually try to pay $75 an acre. As a mineral owner I would push to $100 - 125 unless they really want the place and you have enough interest and they have already leased everyone else you might push to $200 to get the deal done.

We have had issues though with owners still wanting the high horizontal bonus where those economics just do not work for a conventional well.

Also, if it is a conventional well I would have a Vertical Depth severance releasing any depths below the conventional well or excepting the Barnett Shale formation if they are drilling deeper to protect yourself for any future activity in the Barnett Shale.

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Ms. Barnes, A few years back I assisted my wife and her two sisters with probate to gain mineral rights on two sections in the Culbertson Montana area. In mid 2014 we finalized the ownership effort. Sadly in January 2014 oil was selling at 100/barrel and there was much interest in the Culbertson area.

Now that oil is hovering at $50/barrel do you forecast any interest in this area for future oil lease opportubities and if so can you identify those companies?

I do not work in Montana. I suggest that you repost this in the Montana Mineral Rights area under the correct county and folks there may be able to comment.

Thank you! I will report the question

Haven’t seen any interest in a looooooong time Montague Co TX, but out of the blue got a letter (which I haven’t responded to) and 2 wks later a follow up call from the same land man about leasing in the C. L. Oliver Survey A-586. As Lance_Brashear mentioned, the last time I leased it was for horizontal and to my knowledge, nothing was drilled (at least I’ve never gotten royalties).

This lease offer is $75/net nma, 1/6 royalty for 3 years. Lance_Brashear, I’m wondering if the activity in that area is about to start back up, and if so, what terms should I counter with?

I appreciate any advise.

RR Fan, how long have you owned the C.L. Oliver Survey A-586. Are you a descendant of C.L. Oliver is what i would like to know? She originally moved there from Tarrant County, and Shelby County before that. She and I are third cousins, and I have been writing a biography on her parents.

RR Fan, just so you know, Cynthia Lovena Oliver nee Johnson (1830-1908) obtained that survey in 1885. She was the widow of William P. Oliver (1819-1868) of Shelby County, Texas, an emigre of the year 1839.