Please don’t take any of these as definitive facts, but this is what I gathered or think:
- You ostensibly own 35.55 mineral acres in Sec 25, we aren’t sure where in Sec 25 but it may not matter
- Your land is, presumably, unleased since you don’t know anything about this and there should not be old leases here.
- Delaware Basin Resources is offering to either lease your minerals, or buy them. One would guess lease them.
- If you sign an OGL (lease), you will receive an upfront bonus (per mineral acre), then you will get an agreed upon portion of the proceeds from that acreage (the royalty). They should be offering you a 25% royalty. Would guess bonus is something in the $5k-10k range.
- I’m 98% sure that Delaware Basin Resources = Patriot (PRI Operating) = The operator of wells in the section. DBR has signed > 30 leases in Sec 25 in the last 3 years. Let’s assume that the operator is offering you a lease.
- Patriot drilled two Reedbuck State Wells in 2018. Which are currently producing. All acreage in Sec 25 and Sec 6 was pooled into a 1305 acre unit. So that means your unleased acreage has been pooled. There are notes on the well permits saying that there was unleased acreage in Sec 25. That’s probably you (and others, perhaps). In theory they had to offer you a lease prior to drilling the wells, chances are they didn’t know how to find you, so they posted a notice in the Midland paper and submitted that to the TRRC (texas O&G governing body) as part a Rule 37 exception, thus they can get a permit where unleased minerals are pooled. Chances are they were just going fast in getting the wells drilled and didn’t get everybody leased, or maybe didn’t know how to find you until now.
- Because you are unleased, you should, in theory get “carried” in those two wells. Which means that once the wells generate enough net revenue to pay for the costs, you should get revenue equal to a 100% royalty lease on those two wells. That’s not a great deal for the operator, so they are still trying to get you leased. You should probably want to get leased, IMO. It’s just a lot cleaner.
I would suggest being proactive. Call PRI in Midland. Ask to speak to the someone in the Land Department, then ask to speak to somebody covering Reeves county. Tell them you think you own 35 unleased mineral acres in the Reedbuck unit. They should be able to verify that is the case. They are going to want you leased. Which is why Delaware Basin is calling you. But it’s probably easier to talk to the operator directly as I think you need to figure out what the deal is with your share of the two existing wells. So talk to them about a lease offer and what the scoop is on having two active producers on your currently unleased minerals. You both probably want the same thing, for you to be leased, so they should be fairly upfront with you.
I don’t know what bonus are going for around there. I would guess maybe $10k/acre. Your royalty should definitely be 25%.
Your acreage is pretty decent. Good Wolfcamp A & B wells. Maybe some BoneSprings down the line.
Maybe I’m wrong on all of that, best of luck.