Gas, oil, and mineral rights to W/2, section 41, block 31-T1N can anyone share info on this part ive already signed a lease with Dudley Land Company, Inc they are paying me 3,000$ per acre for a 3 year drilling lease with royalties. I have no clue about all this. Can someone please explain this all to me in plain english lol im lost and confused
Dear Lost Becky -
Welcome to The Mineral Rights Forum, where all new-to-you, totally baffling things are explained in terms an actual human being can understand (Pay no attention to the Guy behind the curtain)!
T. S. Dudley & Associates is a Land Services Company that appears to have been contracted to lease lands in your area. They do not Drill or Operate Oil and Gas Wells, only act as a Temp Agency, hiring Landmen like me to do other peoples' paperwork.
I do not know who they represent, but SM Energy Company and Hannathon Petroleum, LLC appear to be the major players in the area. Or they could be leasing lands for a "Spec" Buyer that will try and sell the leases at a profit at some time in the future.
You probably allowed them a 3 Year Primary Term, but with an Option to extend that Primary Term an additional 2 years (referred to as a "3+2" in Industry Slang). That means they have up to 5 years to Commence Operations for the Drilling of an Oil and Gas Well. If they don't, your Oil and Gas Lease will expire and someone will probably come along and lease it again.
If they do drill an Oil and Gas Well and it is successfully Completed, then the clock on the Primary Term, extended or not, stops running because your Lease is then Held By Production (HBP) until production in ceases. That could be 50 years from when the Well was Completed.
You reserved a Royalty in your Oil and Gas Lease, or at least I hope you did. What that amounts to is if or when a Well is completed, you will begin receiving Royalty Payments, the Solvers of many of life's pesky little problems.
Think of it as if you were the Author of a book that ended up on the New York Times Best Sellers List. Every time one of you books sells, you get a royalty. Only we're talking Barrels of Oil and MCF's of Natural Gas.
Your percentage of Mineral Ownership in the Half Section, how large the "Unit" is that your lands are included in, how much Royalty you reserved in you Lease, and how much Oil and Natural Gas is SOLD from your Well(s) [Remember that PRODUCED is one thing, SOLD is another], will all effect how much you will receive in Royalties.
No, I can't tell you how much you will be making. Too many variables and too little information at this point.
-
Attached is a little information I pulled together for you on your property from a website called DrillingInfo. You might have a little trouble understanding what it all means at first, but everything is difficult in the beginning, so just dive in and see if you can make any sense of it.
Lost Becky 01 shows you where your half Section is located in Howard County. It is about 4 miles East of Big Spring, Tx and 3 miles West of Coahoma, Texas, and about half a mile north of I-10. If you have never been there, I can send you a few aerial photos of the land and area. Think hot, flat and dry, with rocks, sandlike dirt and very little vegetation. If you ever visit it, you probably won't want to get out of the car.
There have been a couple of Conventional Oil and Gas Wells (the straight down kind) on it that produced in the past, but nothing is producing at the present.
There are a number of the new kind of Unconventional (Horizontal) Wells that are either already completed and producing or that are currently being drilled to the West of your lands. This is great, because it appears that one company or another may at some time in the future be drilling a Horizontal Well, or several Horizontal Wells, on your land or on lands that yours is "Pooled" with.
Lost Becky 02 contains information about the Hannathon Petroleum, LLC - Zilbert 6-43 Unit No. 1WA Well, a Horizontal Well currently being drilled just a little over a half mile to the West of your Southwest Corner.
To be more exact, the Bottom Hole Location (BHL) (the end of the Horizontal Well) is just over a half mile to the West. The Surface Hole Location (SHL) (the beginning of the Horizontal Well, where the Drilling Rig is located), is a little over a mile and a half to the South of the Bottom Hole Location.
It is an approximately 1-1/2 mile long Horizontal Well, once they have drilled down into the Target Formation, which in this case appears to be the Sprayberry (Trend Area) formation.
On Page 3 of Lost Becky 02 I have included some notes explaining what things in the Table of Wells (and that you will find elsewhere in the two files) actually mean.
The Zilbert 6-43 Unit No. 1WA is the closest Horizontal Well being drilled near your lands at present. If you will remind me from time to time, I will help you keep up with it's Completion and Production Rates.
-
If you haven't already begun receiving them, you can expect to begin receiving offers to buy your mineral interests. When you do, I advise that you seek the advice of an experienced Oil and Gas Attorney about the offers and that you never, ever, ever accept the very first one.
Hope this helps -
Charles Emery Tooke III
Certified Professional Landman
Fort Worth, Texas
PS: There are never any sure things in the Oil and Gas Industry, but if you want to, no one will hold it against you if you begin practicing your "Happy Dance". Just maybe not in public yet...
375-LOSTBECKY01.pdf (310 KB) 376-LOSTBECKY02.pdf (727 KB)Very good response, Charles.
Omg thank you so much for the info ive never been there would love pics of the place
Here you go!
Not exactly Shangri-la, but at least you lucked out and actually have a few Live Oak Trees scattered around your Dirt and Rocks.
The light brown colored areas in some of the aerials is crop land, where they are growing cotton or something. Your lands have a couple of houses in the SW corner, railroad tracts running just inside of the southern boundary line, a couple of old oilfield facility locations (probably the old wells I mentioned yesterday), and a trash dump.
And it appears your lands are in Sand Springs, Texas, on County Road 37 / N. Moss Springs Road.
Hope this helps -
Charles
372-01.GOOGLEEARTHAERIALAREA.pdf (262 KB) 373-03.CORD37N.MOSSLAKEROADSANDSPRINGSTX.pdf (201 KB) 374-02.GOOGLEEARTHAERIALSECTION41.pdf (182 KB)3 more.
Love your Christmas Mustache! Is that foam from your Eggnog?
369-04.VIEWINFROMSOUTH.pdf (168 KB) 370-06.HOUSESANDRAILROADTRACTSINSWCORNER.pdf (232 KB) 371-05.VIEWINFROMNORTHWESTCORNER.pdf (182 KB)Lol tysm but where do i see the pic lol
Click on the Red Boxes one at a time. They are pdf files of the aerial photographs I downloaded from Google Earth (2015 aerials I think).
You can then save them to your hard drive.
Oh wow thats just too neat...another thing im confused about is my uncle said we dont own the land just the oil, gas, and mineral rights. My 3rd great grandfather John H Anderson bout the land in 1901 and I inherited 2.5 acres of it when my father Wesley Anderson Bailey passed away in October.
It sounds like your 3rd Great Grandfather might have reserved at least some of the mineral interest when he sold the property. That's a pretty common occurrence.
You appear to own an undivided 2.5 Net Mineral Acres out of the 320 Gross Acres making up the West Half of Section 41. Your 2.5 acres is not a separate piece of property, it's a portion of the whole.
Yes me, my Uncle "Beetle" James Bailey, and 2 others all split 10 acres
366-20171214_121626_Film3.jpg (679 KB) 367-20171214_121646_Film3.jpg (633 KB) 368-20171214_121704_Film3.jpg (557 KB)
DB%209-423%20McKinney%20to%20Anderson_Source%20Deed_1.PDFSome pics of me lease
364-20171214_121718_Film3.jpg (403 KB) 365-20171214_121734_Film3.jpg (568 KB)
I've never heard of Grenadier, so it may be a partnership that was put together to buy and flip leases.
What about Paragraph 3 of the lease form, the Paragraph regarding Royalties? Or that part of the Addendum (Exhibit) that addresses Royalties?
Excellent! You reserved a 1/4 (25%) royalty in your lease. That's the maximum I've ever seen a small interest owner receive. Medium and large owners, too.
You're set. Only next time, don't allow anyone 30 days to pay the Bonus Money. They may have taken all that time trying to flip the lease (sell it at a profit) before they had to pay for it.
Wow i had no clue...!! All i know is this is all a huge huge blessing to me I needed this so bad in so many ways...i have no water, barely any food..ect....will finally be able to get a car after almost 7 yrs without one!!
359-Screenshot_20171214141408.png (491 KB) 360-Screenshot_20171214141514.png (516 KB) 361-Screenshot_20171214141449.png (520 KB)
Wow i had no clue...!! All i know is this is all a huge huge blessing to me I needed this so bad in so many ways...i have no water, barely any food..ect....will finally be able to get a car after almost 7 yrs without one!!
358-Screenshot_20171214141408.png (491 KB)Been there several times myself, so I can completely relate. It is a good sigh of relief when good things come back around.
More info
355-Screenshot_20171214141458.png (572 KB) 356-Screenshot_20171214141422.png (442 KB) 357-450_88.pdf (93.7 KB)
Amen to that