My wife and I have 13.333 acres as well as other family members and a church for a total of 200 acres. In Feb. 2010 we signed a lease with MJC Resources, LLC. for 3 yrs. We signed our lease for 600.00 per acre bonus. and a 1/20 royalty. I have been approached by McAfee land management stating after a series of assignments Apache Corp. acquired this interest and is the present owner of such lease. They are proposing an extension of 3yrs at only 300.00 per acre. My question is does anyone have any knowledge of Apache? Shouldn't I be getting at least as much or more than the orginal lease?
Our land discription is as follows: SW/4 NE/4 AND SE/4 of Section 65, Block 41, H&TC RR Co. Survey Hemphill Co, Texas. (NMA13.333/GMA 200)
Our orginal lease was put together by a friend who works for an Oil co. So I am pretty confident in how it was written up but should I be looking for a lawyer? I live in Washington State so it is quite difficult to know exactly what is going on.
We have other wells producing with Devon energy should we be asking them if they might have some interest?
I have no idea what the other leases were negotiated for.
Thank you in advance
William, I certainly hope the 1/20 is a missprint, 20% [ 1/5 ] would be more like it and 4 times as much as 1/20. If you did actually sign a lease for 1/20, they would probably assume that you have no idea of the worth and only offered you $300 so you would have something to jump at so they could keep the 1/20 royalty the same, which I think no knowledgeable mineral owner would agree to.
If you did execute a lease for 1/20 [5%] you do not want an extention, you want a new lease at a much higher royalty amount.
Yes I'm sorry! Should be 1/5 I must have been thinking 20% and inadvertately put 1/20. Thank You. When you say royalty amount are you talking up front bonus or increase in royalty percentage ie. 25%?
William, I just wanted to make sure it wasn't 5% or 1/20. Some people have negotiated leases and not done a great job of reading the actual document when it arrives and had a nasty surprise in the terms.
I would definitely get more offers. Interest in your area may have waned but you will never know with just one offer.
How would a person go about getting more offers?
William, first I would join the Hemphill county group and see if I could figure out who is operating wells near my area. You can ask Devon and if they aren't interested, a landman there may be able to offer a suggestion who would. You could also list your minerals on the home page of MRF (scroll down to find listings) and someone may contact you.
Thanks Pete, Why not go for both, higher bonus with a higher royalty? I was thinking maybe asking for $1500. per acre and a 25% Royalty. Am I being a bit too greedy?
Bill
I am curious how this turned out? My family has about four sections in this area that is currently unleased.
I guess I will never find out how this went down. Eagle Rock's new processing plant at Wheeler came on line in July. That may or may not improve things. Apache has signed a fee based processing contract with Eagle Rock and that may mean increased production on some wells.
It looks like the most active drilling activity is on a southeast line from Canadian to Wheeler County; the Stiles and Frye ranch area.
If you go to the Railroad Commission's interactive map, the gas lines are marked in green. That may give some idea where one's product is being processed.
This oil and gas business is chicken one day and feathers the next.