I have had an offer to lease my minerals in Block C-17 Section 21 for $2500 an acre. My sister, my brothers and I have 25 acres each for a total of 100 acres. I am wondering if this is a good offer or too low. I believe this is in the Delaware Basin. So, basically, what I need to know is what is the going rate for this area?
One year ago I leased my 80 acre mineral rights for $2500/acre for 3 yrs plus a 2 yr option and 25% royalties if they drill. My acreage is in C-18 Sec 4. I think it was a fair price and worked with a lawyer, Wade Caldwell to get the contract right. I highly recommend a lawyer to get the all the contingencies right. I think it might be worth a little more today due to the development to the SW plateau in Reeves County.
All the best of luck.
We used Wade Caldwell and he more than paid for his fees. He does a great job.
Julia, We have 5 acres in south half of Section 21 Block C17 and were just offered the same $2500 an acre, 3 year with 2 year option same bonus, 1/5 royalty By Orange Energy representing Three Rivers Operating Company. Sounds like the same deal.
We had this leased to Petrohawk starting in 2012.
Any thoughts & advice is welcome
Reeves County is very active for leasing and terms have improved this year. GLO will no longer accept 3 + 2 leases (only 3 year term) and requires 1/4 royalty. Take a lot of time and check to see who is leasing in the area.
Thanks, TennisDaze, I’ll try to see who is leasing in area 3 years only & 1/4 I understand But…what’/who is “GLO” A little new to this
Who did you lease to, Fred?
Thanks for the info?
What did you decide to do on yours? Ours is in the north half. We don't ever do the two year option and in the past have gotten 1/4 royalty in Reeves county on the first offer, but I don't know if this offer on the bonus is what it should be going for. That is my question. Our offer was from the same company as yours.
GLO is Texas General Land Office which manages state-owned minerals and surface among other functions. Much of the associated revenues goes to education fund for Texas schools. It maintains original records on lands sold by Texas. You can look up your abstract number and see if those records have been scanned yet. Use GIS viewer to find mineral files near your property. All leases on Texas minerals under GLO management are public record and scanned into viewable files. You can see leases, with bonus and terms, pooling agreements, correspondence etc. It takes a while to find your way around the GIS map viewer, but worth doing. You have to activate the energy level. Also, GLO holds sealed-bid lease sales every 6 months, now through EnergyNet website, and posts results. All terms are set under lease and bids are bonus numbers.
thanks TennisDaze. your right, GIS navagation is painfully interesting.
Julia, I have only requested a copy of the lease and expressed a desire to go forward. Next week I'm on the road so nothing is going to happen for a while.
We leased to KEW Drilling Co., but I belieeve that they may flip it.
r / fred
I am negotiating 50 nma via Orange Energy for 3 Rivers for $2500, 1/4 royalty, straight 3 year primary lease, Based on my convoluted history on sec21, Blk C-17, t think the price is fair, but I would like to be shown that more can be gotten.
2nd proposal received on our 5 ac south sec 21 C17
I got a call from William Wood, Black Oak, Houston proposing $2,750 nma 1/4 straight 3yr with vertical & horizonal Pugh and 18 month cumulative shut in terminates the lease. He’s mailing me the lease to review.
Any info on Orange & Black Oak would be helpful.
Black Oak and Orange as leasing agents for various oil companies. Ask who their clients are. Take your time as you may have a bidding war. As always, the exact written lease terms are extremely important. Is it market value or proceeds lease.? If cost-free, does the wording satisfy Heritage case decision requirements?
Orange: I don’t know why I asked for a copy of their lease. It’s awful. I probably should have started with the ‘Amendment’, 'Exhibit ’ or whatever you want to call it that modifies and takes precedent over the Lease and asked to see what kind of Pugh clauses, royalty clauses, depth etc they could live with. The worst, IMHO, is the shut-in language in the Lease- i.e. A little work every 6 months and the Lease is never terminated.
To your excellent questions the Orange offer is value on oil and proceeds on gas less less my % on expenses. I don’t know what is fair/customery and I’m not clear as to what is obtainable./reasonable. Demanding cost/expenses exemption from taxes & acts of God might be a bit much- I don’t know. I’m trying to come up to speed on the Heritage/Hyder stuff.
So, on the second offer from Black Oak I started with ‘send me a bunch of changes’ before to get started. Have not received same yet.
It’s a process and I’m retired so I can fuss with this. In fact I’m old enough that I probably should be selling the minerals. Thanks for your input. Since this is only 2.5 acres each for my brother & me I’m trying to learn and not just hire a lawyer.