Hi All, back in early-mid 2011 for a small plot 40+ acres, EOG offered 3-year primary / 2-year extension lease in La Salle (dull) started at 500 per net acre and 20% royalty.
We signed at 1000 per net acre and 25% cost-free royalty, yes to water rights, no surface rights.
At that time it was pretty good, but as of today I think it should be more. So far to date EOG and others are getting 100% success in drilling wells at 5.5 million each and approx 5000 barrels per acre recovery.
5000 x let’s say 90.00 per barrel = $450,000 that’s per acre, at 640-acre pools that’s 3,200,000 barrels of oil.
X $90 per = $288,000,000 - 25% royalty = $216,000,000 to oil company and 72,000,000 to land owners.
$216,000,000 for an investment of 5.5 million for well and 0.6 million for lease cost. Investment over say 5 to 15 years NOT BAD in my book.
I hope you all hold out for 30% cost-free royalty and 2 to 3000 for bonus.
I think they will drill the prime spots and bundle up the rest and sell it to foreign country at 10 to 15,000 an acre. I don’t think they will lose money on the acres they don’t drill.
But my question is: do the oil companies send out division orders before they file drilling permits with the RRC or after?
Am I wasting my time looking at the RRC for drilling permits on my land because the division orders will come in the mail first?
Good luck to you all and thank God.