My land is located in Cat Spring, TX, Austin County Texas. There has never been in active drilling in my area for the last 50 years. Recently a large well has started drilling down the road from me. I was told the drilling rig belongs to Nabors Drilling and they are going down 18,000 feet. Two days ago, I was contacted by Calloway out of LaGrange about leasing my land with is 75 acres. I have 3/8 of the minerals on the property. I was given a contract for them to run 3D sesmic and lease for 3 years plus 2 yr. option. The other mineral owners have leased, I do not want to lease without a waiver of surface usage rights by the company and I do not want them running sesmic 3D on my property. I live on the property in home I recently built. In addition I have wells, cattle etc. Needing advice. Thanks.
Hi Wayne
I'm a novice to the mineral owners' perspective of all this. I suspect it'll be hard to get anybody interested in drilling without having the ability to get seismic data.
But I do have a little history which may interest you. During the early '80s I was working for Hunt brothers companies.. Penrod drilling and residually Petra Oil (questioning my memory on Petra being the right name). Our rig drilled 3 very deep vertical holes between Sealy and Cat Springs. I'm remembering them to be much closer to Cat Springs because we often went there for a beer. We were drilling 5 mile deep holes (near 30,000 feet - i think one surpassed 30,000) which were records at the time. There was alot of gas around there at several different depths. On two of the holes we had multiple controlled blowouts before completing the hole. I remember one of them being plugged though, due to too much H2S gas.
It doesn't answer your questions, but thought it might be interesting to ya.
good luck
Larry
correction.. it wasn't Petra Oil Co. - it was Placid Oil Co.
Larry said:
Hi Wayne
I'm a novice to the mineral owners' perspective of all this. I suspect it'll be hard to get anybody interested in drilling without having the ability to get seismic data.
But I do have a little history which may interest you. During the early '80s I was working for Hunt brothers companies.. Penrod drilling and residually Petra Oil (questioning my memory on Petra being the right name). Our rig drilled 3 very deep vertical holes between Sealy and Cat Springs. I'm remembering them to be much closer to Cat Springs because we often went there for a beer. We were drilling 5 mile deep holes (near 30,000 feet - i think one surpassed 30,000) which were records at the time. There was alot of gas around there at several different depths. On two of the holes we had multiple controlled blowouts before completing the hole. I remember one of them being plugged though, due to too much H2S gas.
It doesn't answer your questions, but thought it might be interesting to ya.
good luck
Larry
If the other 5/8ths mineral interests (non-surface owners) have already signed OGL then the company/nominee can make entry and do the seismic without your consent, also they can pool the 5/8th leased with other tracts into a unit if they comply with Rule 37 (drill a well on neighboring tract 467 feet from your property line) an d you get nothing! To protect yourself, I'd recommend hearing out their best lease offer for a 3 year term without the 2 year extension and be sure to import strict land-use provisions in your lease.
I thank you for the advice. What upsets me is the fact that land in the area is now valued at$10,000 plus per acre. If the drilling starts all of the sudden the surface value will drop like a rock with the well pads, trucks, traffic and people of all sort coming and going at will upon you land. So in my case land now valued at $750,000 will go down to less than half for a few thousand of dollars. I cannot see the economic sense in that.
it's only worth that if you sell it and your unit royalty participation in a gas/oil well can be enjoyable ... I know a DeWitt County owner with 19 acres in a 600+ acre unit drawing $15-$18 thousand/month
if a well-site/pad, road etc. are placed by the oil company, you can appeal your appraised value to the CAD ... also, in the case of my-managed property in Orange County, Texas we get a negotiated $30,000 Surface Use Agreement one-time fee and $2400 per annum "rental'
Thanks Rocky, I did not think of the surface fee ageement, annum rental and making an appeal to CAD. However, the monthly amount I am getting all over the map. I am also trying to find out about the taxes on the minerals by the feds, state and county. Thanks againn for all the useful info. I love this site.
Minerals in place are not taxed in Texas, only after production is royalty taxed by the County. State taxes are at the well-head in the form of severance tax paid by the operator/purchaser of the well products: 4.6% on oil, 7.5% on gas. No federal tax, only applicable income tax on which you get a 15% per annum depletion allowance. Bonus/OGL for 3 yr-paid up term OGL should be in the range of $1,000-$2,500 per net mineral acre (NMA) ... you appear to own 26.25 NMA, or 3/8 of 70 gross acres, right? Good luck and let's hope that prosperity awaits you.
Bonus will go as regular income -- right?
Rocky Arrell said:
Minerals in place are not taxed in Texas, only after production is royalty taxed by the County. State taxes are at the well-head in the form of severance tax paid by the operator/purchaser of the well products: 4.6% on oil, 7.5% on gas. No federal tax, only applicable income tax on which you get a 15% per annum depletion allowance. Bonus/OGL for 3 yr-paid up term OGL should be in the range of $1,000-$2,500 per net mineral acre (NMA) ... you appear to own 26.25 NMA, or 3/8 of 70 gross acres, right? Good luck and let's hope that prosperity awaits you.
YES, no depletion allowance on bonus ... dang!
Dillon said:
Bonus will go as regular income -- right?
Rocky Arrell said:Minerals in place are not taxed in Texas, only after production is royalty taxed by the County. State taxes are at the well-head in the form of severance tax paid by the operator/purchaser of the well products: 4.6% on oil, 7.5% on gas. No federal tax, only applicable income tax on which you get a 15% per annum depletion allowance. Bonus/OGL for 3 yr-paid up term OGL should be in the range of $1,000-$2,500 per net mineral acre (NMA) ... you appear to own 26.25 NMA, or 3/8 of 70 gross acres, right? Good luck and let's hope that prosperity awaits you.
I spent part of yesterday speaking with an attorney about my concerns. I felt better after speaking with him and a few hundred dollars lighter in the wallet. It seems I still hold a few cards in the game. I was also contacted last night again by the company and they act as if they want to work with me to resolve the situation. Can anyone tell me with my 3/8 mineral at 3/16 an approximate amount I could get per month on oil if they drill nearby and hit a home run with the well. Thanks
Been going threw the same thing as you. Same area, same company, same everything. We singed a couple of weeks ago, made a ton of changes to the contract, sent you a friend request so we could exchange contact info if you want to know more. Hope I can help!
I would like to update what has happen here in Cat Spring. The very large Nabor drilling rig has moved off 949 and went to another location a few miles over. The drill site on 949 now has something I never have seen before. There is a well head with control valves that go up in the air at least 75 feet. it is now being supported by two cranes. I was told this is a high pressure control situation. Can someone give me tell me what is going on. They have also ran pipeline from the location and tied into a nearby existing line. I was also told they are buying right of way for pipe line where the other well is located. My neighbor who has not signed yet told me he was contacted the other day by another company wanting to lease. Any info would be welcome. Thanks
Is the activity in the Cat Spring and Sealy areas wildcat or other? A friend who has property on the west side of Sealy toward Cat Spring is hearing rumblings that her neighbors are being contacted about seismic leases on their land. Is this all part of the Eagle Ford or another formation?
From what I am learning, this is going to be big. It is not part of Eagle Ford, it is new know as Midway Navarro formation. I recently found out that the outfit behind all of this is a new company called Halcon Resources. The owner was the man who started Petro Hawk that he sold. He was the one who discovered Eagle Ford. According to what I have been told, he is selling everything in the Eagle Ford and is putting it into Midway Navarro in Austin county. The company released a statement last week about a major find in the area and there stock went up. They have also just released articles in Houston Business Weekly, Wall Street Journal and have been on Fox Business and MSNBC business. You can go to Halcon Resources website and see some of this or just google Halcon and Midway Navarro find and you will see a lot more.
Wilson of Halcon seems to have the Midas touch. Does anyone have any idea of how far this formation extends? Does it go west at all to Fayette County?
Not sure i appreciate your info. I too, in the current pool. I have been what I would call an arm chair researcher. Not knowing much about all this has me very interested and curious. Suprising what you can find on the internet and on youtube. I thought this might be part of the Austin Chaulk, but found out either that is deeper or they passed through it to this. Either way it is facinating to me. That big "thing" on top of the wellhead on site 1 was something used to get measurement tubing down the borehole and not kill the well. From my understanding.
I apologize. Should of read Not Sure, I do appreciate your info.
David Goddard said:
Not sure i appreciate your info. I too, in the current pool. I have been what I would call an arm chair researcher. Not knowing much about all this has me very interested and curious. Suprising what you can find on the internet and on youtube. I thought this might be part of the Austin Chaulk, but found out either that is deeper or they passed through it to this. Either way it is facinating to me. That big "thing" on top of the wellhead on site 1 was something used to get measurement tubing down the borehole and not kill the well. From my understanding.
Seismic leases? Do you know what company is doing that? Can you find out? Just very curious. Very Historical around here.
AMF said:
Is the activity in the Cat Spring and areas wildcat or other? A friend who has property on the west side of Sealy toward Cat Spring is hearing rumblings that her neighbors are being contacted about seismic leases on their land. Is this all part of the Eagle Ford or another formation?
I'm not sure if it is the same group as mentioned by Wayne Cox, the person who started this thread, or another group. Wouldn't it be nice for those involved if there were multiple interested parties! Surely the grape vine in that area can determine where the activity is and who is involved. I haven't heard anything further from my friend. And other than press releases from Halcon, I haven't seen anything about the Midway Navarro.
David Goddard said:
Seismic leases? Do you know what company is doing that? Can you find out? Just very curious. Very Historical around here.
AMF said:Is the activity in the Cat Spring and areas wildcat or other? A friend who has property on the west side of Sealy toward Cat Spring is hearing rumblings that her neighbors are being contacted about seismic leases on their land. Is this all part of the Eagle Ford or another formation?