We don’t do a lot of business in TX so I don’t have a great pulse on market pricing for leases in Houston County. We have a group trying to lease our minerals for $275 an acre for 3 yr, 20% royalty lease. Can anyone share some top end offers they’ve received? Offers at 20% royalty? Also, anyone getting options to lease at 25%? That’s normally the royalty we require in our OK leases.
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Prior posts in the Houston County section of this forum will give you some background on what is happening in Houston County:
If you post where your minerals are located (survey name and abstract number) and what group sent you a lease offer a number of us will be able to help you.
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Thanks Alan. I read through several posts already from the link you provided. It is that same Cypress and Magnetar groups that sent our letter.
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Cypress may be leasing for Expand (formerly named Chesapeake). They worked together in Louisiana. I’m not sure what Magnetar is up to. They have leased acreage in the Bossier/Haynesville play areas in Houston and Robertson Counties.
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I received a 3 year paid up mineral lease offer from New Land Ventures, $350 NMA, 20% royalty. Survey: Juan La Riviere, A-49 Prospect: Mitsui Houston Area C, Tract # TX-49-189.1. Does this offer seem reasonable at this time? My brief research suggests $350 may be on the low side.
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Interesting! This is the first indication that Mitsui is competing with Expand for acreage in Houston County! Drake Exploration, leasing for Expand (Chesapeake) has leased more than 1,000 acres in the A-49 Survey.
Mitsui and Expand are competing for acreage in Anderson County and lease terms have reached $1,250 bonus and 25% cost-free royalty.
Of course there are no certainties in lease negotiations, but you should be able to get more than your initial offer.
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Thanks for sharing this important information. It will possible help mineral owners in the area. The Bob Yancy well is just immediately East of your minerals. It was a test well drilled to about 18,600 vertical depth. A large Estate was offered $8,700/net. mineral acre to purchase their mineral rights just recently. You should insist on a 25% royalty and a good lease form is a must. You are in the “drivers seat”, don’t leave Money on the Table! There are going to be horizontal wells drilled in this area real soon. By you sharing the name of the Broker and the terms offered helps everyone! Good Luck.
Drake I & Drake II along with Mitsui’s broker are offering the same terms in Houston County. Price Fixing? Chesapeake has be know for this.
This is not within the definition of price fixing under federal law. Brokers and oil companies generally know what going rates are being offered by competitors. Brokers representing oil companies are instructed as to what bonus and royalty can be offered. No oil company wants to overpay and end up with uneconomic wells. Oil companies will offer higher bonus in hot areas or areas with proven wells and production vs areas which are more speculative. And large mineral owners can more often negotiate better deals. Or perhaps the last holdout in the very center of a planned well. Mineral owners are free make a fast deal or wait it out, knowing that they may or may not get more or end up being carried. From the mineral owner perspective, royalty and bonus offers may the same from multiple brokers, but the lease terms should be viewed as equally important. It is a long-term business deal for everyone.
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What if a mineral owner owns 100% of the minerals in a tract that is not a drillsite tract? Or is a tract that a proposed horizontal well bore may pass through?
How would you know this during negotiations? How big is your lot? If it is small, the wellbore could be moved to exclude your tract and be far enough away under RRC rules. Or wells could be drilled to end on either side of your tract. Too much speculation here to determine your negotiating power. However, once a small tract is isolated from surrounding wells, then it will not be drilled. Relatively few mineral owners hold 100% of large tracts of land, or even small tracts.
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