We have a small mineral ownership in Reeves County, had an oral offer of $1200/acre and a fifth. But the PSL auction data from April this year seems to indicate that the per acre should be about twice what’s been offered. Our little area is about 5000ft to a producing well to the north of it, and to the south of it, about 5000ft to a newly permitted location. Any comments/advice appreciated - thank you.
You didn't write whether your interest is an undivided interest [a portion of a larger tract] or an individual tract. The reason I write this is because you need to consider pooling factors to ensure that your mineral property is included in any unit or pooled unit to be formed. It is true that the State and large landowners are able to command higher bonus'. Depending on the size of your tract, i would recommend that you concentrate more on the royalty aspect of the transaction. you should be able to obtain a royalty rate of 25%.
Hope this Helps
Thanks Ernie - appreciate your reply.
Our small interest is part of a larger tract, it's one of those inherited from the great-grandmother type things, so its been split many ways over the generations.
We negotiated further with them today, and got a better bonus number and 25% royalty. I asked for a sample lease which they sent, and its basically a Producers 88. I want to add in clauses for zones, since this company seems only interested in one formation. Are there any resources available that help to show what a mineral owner should change in a Producers 88? The (small) amount of money (which will be going to medical bills) we would be getting doesn't really provide enough to retain an attorney I think, though I would feel better about it if we could...
Who is the Operator, may I ask?
It's Chesapeake according to the landman. I'm surprised they use quite an outdated form.