Is anyone familiar with current activity in the vicinity of Section 78, Block O.W., T.M. Ry Co Survey, A-8390 in Pecos County, Texas? Has anyone leased minerals in that area recently? I’m curious as to what lease terms are being offered (bonus, royalty, lease term, etc.). What should a mineral owner be asking for with regard to a lease? Who is leasing in that area… and what is their reputation? Any information or advice would be appreciated. Thanks!
From a Minerals buyers perspective this area seems to sit in a part of southern/central Pecos County that is considered extremely marginal compared with the “core” Delaware Basin acreage farther north and west. The lack of aggressive leasing and drilling activity is probably due to a combination of geology, economics, and operator focus. It’s outside the highest-quality Wolfcamp/Bone Spring fairway. The productive parts of the Permian tend to attract continuous leasing because operators already know the rock quality, pressure, thickness, and hydrocarbon saturation are excellent. In Block OW, especially around Sections 70–80, operators historically drilled fewer horizontals and results were less proven than in Reeves, Loving, Midland, or northern Pecos County. Discussions among mineral owners and landmen repeatedly mention that leasing activity in southern Block OW was sparse, while companies concentrated farther north. Modern shale development favors very large contiguous leaseholds so companies can drill long horizontal laterals (2–3 mile wells). Section 78 is likely surrounded by numerous mineral owners ownership or patchwork leasing, so it becomes less attractive and speculative at best. Also Leasing in this area was sparse over the years after nearby wells demonstrated very poor results. Exxon packed up their bags and left this area years ago for a reason.
In shale plays, one or two disappointing offset wells can stall leasing activity for years which seems to be the case here. Even at $100 oil this portion of Pecos is considered a no buy zone for us. Hope this helps.
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Thanks for your reply, Eric. Much appreciated. You mentioned “… no buy zone for us.” Are you associated with and oil and gas company?
We buy minerals in shale plays where there are active permits, heavy leasing activity and offset production. I believe someone asked about this specific portion of Pecos County. We consider it as a no buy zone because of the limited production and zero permits to drill. I was surprised to hear about this portion of Pecos as it historically has been a dead spot for geological reasons. I’d be surprised if anyone was leasing in this portion of Pecos as it has proven over time to be non-productive. If you have any minerals for sale in Reeves or Martin Counties please message me! Hope this helps.
Eric, please remember that no solicitations are allowed on the forum. Please delete that last sentence.