Steve most mineral rights are an undivided interest, at least mine are so one well on 160 acres would include everyone who has interest in the 160 acres no matter where it is drilled.
Steve I only have interest in two old gas wells on one section,but the oil companies are constantly petitioning the RRC for different spacings.
Billy, the Wolfcamp/horizontal play is changing all of the rules in counties like Reeves. EOG is probably the leader with trying to define just how closely wells can be drilled to most efficiently produce the Wolfcamp. For us, the play really didnât get going until February when we found out that maybe the Wolfcamp and not the Third Bone Spring was the real âmother lodeâ for Reeves.
With most companies now going primarily to horizontals, I believe a base rule of thumb will be 8 parallel wells per section on 80 acre spacing, per pay interval. Per recent articles, closer spacings are being discussed and looked at also.
Billy,
But how many can they put on 160 acres that you would have an interest in? I believe it is currently 40-acres spacing. Some talk of 20 acre spacing in the future. My question is how would our Lessee lay out wells on a 20-acre spacing.
Hello all, I just received a offer from a landman out of Midland for our property SE/4 of Sec 28, Block C-8, abstract 3902. $2000 per acre, 5 year term, 22.5% royalty.
I am fairly new to the forum and this is the first offer received since inheriting the property. From what I have seen in almost all the posts is a 3year term an 25% royalty is the standard. Is anybody aware of going rates in our area? Also, is there some verbiage that may be beneficial in negotiating better term and royalty?
kurt,
ask for 3000/acre, 1/4 royalty and 3 years. see what he comes back with. you also donât want to pay for anything other than your share of taxes. lots more to check out in the lease but this is a good starting point. do not sign for less than a 1/4 royalty. the verbiage is âthis is what I will sign forâ. 
All, You can make your own âaddendumâ and add it to the lease. Just state what you want and tell them to put it down in an addendum to be made a part of the lease as Exhibit A.
Kurt â IMO, you have it correct, the term and RI are more out of line than the $2,000/ac in your particular area. Rather than âis the standardâ, maybe âhas become the normâ is a better description. When was the last time it was leased and to whom? TIA â Later â Buzz
No need to add it into the original lease. We use our own addendum on every lease we execute.
Unfortunately a lease form is very rarely written in the lessorâs complete favor. Itâs all about negotiations and who can live with what. Most operators are ok with a lot of what we want but many will also take advantage of those people that donât ask. With all the help on here Iâm sure youâll work out a good lease.
What about a lease that is State Classified that the State approves. I always thought if the state thought it was a good lease, I wouldnât make waves. Anyone want to comment on this. Thanks, Louise
You canât change a state lease in general but you can stipulate the length of the lease and the amount per acre. We have gotten more than the state asks for in many occasions and set the term at 3 years flat. There is another you can add as well but I need to check what that is before I stick my foot in my mouth here.
Kurt, my advice isâŚListen to Wade!
Kurt, I purchased a lease agreement from Buddy Cotten for a reasonable price and it seems to have the terms that I was trying to cobble together with changes to the oil companyâs standard form. I havenât submitted it to them yet but they indicated that they âmayâ be willing to work off of our own lease form. Shell is the company I am talking to right now.
My concern was that I am a novice and I have read about cases where the lease and the exhibit didnât match up quite right and it wasnât resolved the way the Lessor had intended. Thought it would be better to have a lease form that was written from the prospective of the Lessor and one that was written so that all of the sections fit together. Just what I was comfortable with. I think most people use the standard form and add an exhibit.
Thanks Ann. I do have that statement on mine also.
Craig, this is what I type at the top of my addendum:
IN THE EVENT THAT THERE IS A CONFLICT BETWEEN THE LEASE FORM AND THE CLAUSES CONTAINED IN THIS ADDENDUM, THE ADDENDUM WILL SUPERSEDE THE LEASE FORM.
Buzz, to answer your question, the property was leased to a George Santos Pietro about 11 years ago with a 10 tear term and for a few thousand dollars. My how times have changed.
A new question, given the number of comments about the content of a lease and my lack of experience, it sounds like a attorney would be a good idea?
Thanks
Thank you Wade for the info. The state has always had a good lease for me and even went back after a couple of years once, to the lease company and demanded more money. I was shocked. Again, thank you.