I have producing property in Lea Co NM that was leased to MRC Permium (T25S R36E SEC 17) , a part of which was returned because of Pugh clause in the original lease. Although MRC immediately offered to release the property offering a substantial bonus plus 1/4 royalty and using my lease form. MRC delayed and delayed while ignoring my repeated request to finish the deal and pay me!
A landman that I have had years of successful contact, JP Albert who owns Big Cedar Resources in Oklahoma City offered to look over my situation and came back with a significantly improved bonus offering, with IMMEDIATE closure.
We now have money in the bank and JP has once again come through for me.
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We also were actively negotiating renewal lease in Lea County Oil leases SW4 sec 28 and SE4 sec 28 plus SW4 sec 27. called land man since current lease expires in November. His response was we’ve moved on. Has drop in WTI cooled the market this much?
Welcome to the forum. Landmen are often given a certain batch of money and a timeline in which to negotiate leases before they move on to the next assignment. A change in company priorities or economics can cause them to move on. They also many only need to lease a certain percentage before getting enough to drill forcing unleased acreage into pooling.
That’s an interesting situation. You didn’t mention the township or range, but since this thread began with a discussion centered around 25S36E (the far eastern margin of the basin), it would make sense if that’s where the tract generally sits. Even though there are some exceptional wells in the vicinity, a fair amount of the area is still geologically tricky — structural complexity, variable reservoir quality, and limited well log data make it a tougher call.
When prices soften or operators re-rank their capital, it’s pretty common to see lease renewals pause, especially on the basin margins. A pullback in pricing alone can temporarily stall play expansion in those zones until prices rebound or larger companies (like a Mat) reset their budgets.
Always interesting to see how quickly sentiment shifts from “drill everything” to “hold and evaluate” depending on which side of the margin a tract falls.
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The leases are as follows
SW4 sec 28
SE4 sec 28
SW4 sec 27
Am I correct in assuming you are writing about Sections 27 and 28 in T25S R36E, i.e., in the same township as Archie’s original post?
M Barnes, you wrote the leasing company may need to lease only a certain percentage, after which they can force-pool other owners, if I am paraphrasing you correctly. It was my understanding that they had to make at least a good-faith effort to lease from an owner before they would be allowed to force-pool that owner. Am I off base on that?
Jumping in here. My recent experience with Matador is that they make a minimal effort to negotiate the bonus and refuse to budge on 20% royalty. Then they immediately go to forced pooling.
I was able to get a third party to give me 200% of the bonus that Matador offered and 25% royalty. They fought the pooling and they reached an agreement with Matador. Matador has big plans in New Mexico and they are aggressively trying to get 20% or go to forced pooling. New Mexico seems to be allowing them to do it.
It depends upon the state and their regulations. Some agents idea of “good faith” and a mineral owners idea may differ.