I am certain I have the lease rate wrong…let’s just say we got a bonus of $27,000 for 29 acre equivalent. That works out to $931/acre. I would expect the bonus for a new lease to be more.
55-7 is SW of what has been widely depicted as the main fairway. I have the same issue over into Culberson County…where crickets are chirping. I keep hoping that industry will figure out how to get a better oil cut in these areas. The other thought is that as the nat gas price improves (hopefully), these “gassier” areas will again be attractive. Hope this helps.
I was told by the landman working for Clayton Williams that they tried drilling in my area a few years back & had no luck so moved east. Now they are wanting to try again. They have offered $250/acre w/ 1/4 royalty. He said that was the going rate right now. It sounds pretty low to me. Please if anyone knows where I can look to find the going rate I would be so grateful. Again, we are Section 2, Block 55, Township 7, T&P RR Co. It’s about 10 miles SW of Pecos. Thanks!
Thanks, Scotsy. If that is what CW is offering, I’m sure our bank wouldn’t bother to notify us of any contact. We wouldn’t be interested at that rate. Heck, we were leased back in 2008 for more than that.
Also, thanks John, for letting us know about your lease and about the shut-in well to the south of us. I’d missed that.
What is a disposal well?
Thx,
GKirk
So, could anyone please clarify if a company like BHP decides to go for a 2 year lease extension how does the payment work. I have seen mention of a bonus so does that imply there is an additional bonus on top of the amount per acre like the original lease? We have a new landman for BHP who said today that our 3 yr lease will expire Aug 31. He said currently there is not a recommendation to extend at this time…he said he would check. He said that our mineral rights are in an area where BHP is not totally committed to nor are they a pass too. Sounds like a so so position. We are Block 4 Section 64 NW of Pecos.
I have a lease that will expire in January '15. They are about to drill a well about 150 yards from my property line. The well’s # is 33977. Will the rates to lease go higher and what should I ask for? Blk 4, Tract 68, AB 1154 Blk 4, Sec 68 H&GHNTR Thanks!
Hector – #33977, the HWY 285 BRINE #1 is permitted as a disposal well.
Later --Buzz
Fred, where is this tract, please?
2 years ago it was around $800/acre for a 3 year lease with 2 year kicker.
Marian, We received the extension payment on our lease last year without any bonus since there was no “bonus” included in our contract. New to this negotiation. BHP notified us just a coupe of weeks before the lease would end that they chose to execute the option. We were contacted by Brenda Guzmann (senior lease analyst for the Permian area) of BHP in Houston (direct line:713-585-4349). We were sent the check shortly thereafter.
R / fred
GKirk,
A disposal well is used to “dispose of” waste fluids and or salt-water produced from other wells. There are people who believe the increase in earthquakes in the north Texas area are caused by massive amounts of water injection in the Barnett Shale. Not proven. This one looks like a Commercial Disposal well which could mean the volume of water may be rather high with lots of trucks coming and going all day and night. They have not yet filed their application to inject (form H-1). There will be a notice of application published in a newspaper in general circulation in Reeves County. Notice will be sent to the land owner and the offset operators. The application can be protested.
Thank you, John.
GKirk
Thank you Fred. I will check the lease to see if there is mention of a bonus. The landman’s name is Jay who I talked too. The previous one was Clay.
I have seen a lot of posts asking about lease rates. Keep in mind we are in one of the hottest plays in the country, currently. In my opinion, while it can vary according to your circumstances, the starting point from the mineral owners perspective should be $4500/acre in the very hot areas, $3500/acre in the developing areas, and $2500/acre in areas where there is little leasing, permitting, or drilling.
Just returned from meetings in Midland. The Delaware play is blowing up. Leases should be going for my, IMO. Based on all I hear, the numbers are very robust. Ask for more!
In general, do larger mineral-acreage holdings lease for more, the same, or less than smaller holdings? Husband and his sister each own a half interest (in trust) in 524 acres of the area we’ve been talking about here - Block 55 T7S, Sec. 16. If we are approached, should that affect what we ask? TIA!
I agree, Wade, the prices should have been more all along, now we need to play catch up! We have to start somewhere.
There is never a guarantee that a well will be drilled! I agree that it is the 1/4 royalty that is most important! However, a company that is interested should be willing to pay the going rate for a lease. All I want is a decent lease rate. After all, if they don’t drill my land is tied up for 3-5 yrs.
Stephen,
Our property is at AB-4061 on the map, and in Blk C-18, Sec 4, PSL, W/2, SE/4; about 80 acres. We have already had Southern Union Gas and Red Willow permit pipeline easements down the West edge of the property.
r / fred