Looking for what would be fair lease amounts for 3year terms
We are a couple of sections to the west of you - Sec. 185. We also have a couple of proven wells holding part of our property and that can affect bonus amounts. That said, the lease on the remainder of our property was set to expire in July and a couple of companies approached us early offering $6,000 and $8,000 an acre respectively. We never got to negotiate because the company holding our lease started drilling a third well, effectively holding all of our remaining property beyond July. But I can say we would have turned down both offers. Acreage is our general area has gone as high as $15,000 an acre. Not saying ours would have or that yours will, but these numbers may give you some general guidelines.
Of course, bonuses can be dependent on the number of acres you hold. Small acreages may go for smaller numbers.
Also keep in mind that the bonus is really the least important part of a lease. Percentage is more important than the bonus and the fine print is really important. Best luck.
This has something to do with a burning question I have. For us who own retelivly small lots - any reccomendations for lawyers who handle “little guys”? Just because someone is a small land owner doesent mean they don’t require some legal assistance. Is there any help out there for little red riding hood owners ?
Liz, You mentioned that they drilled another well which meant you could not accept another offer - was that in the same section as the rest of your property? We have mineral interests in 16 different sections, but Apache has only drilled on one of the sections. When our lease expires next year, we should be able to consider other operators for the 15 undrilled sections, right? Forgive my ignorance, but I’m a relative newbie, and I’ve been wondering about that. Thanks, Loree
The answer depends on your lease terms. A single well can hold 40-160 acres (depending on the type of well), or it can hold thousands of acres. It all depends on the precise wording of your lease(s). Were your other sections negotiated as part of one lease, or several? If they were negotiated separately, then I don’t think there is a problem. Even if they were negotiated as one lease, you may have language in that lease that will free the other sections. But you need to know the exact terms - and I am not a lawyer or any sort of an expert so my knowledge is fairly general!
In our case, the new well holds the rest of our acreage for a limited amount of time (a grace period, so to speak) to give the company a chance to drill on that other acreage before the lease expires. Of course, the new well will hold the area it is actually on until the well stops producing.
I can’t answer that question directly - so sorry! But I can say that our lawyer didn’t charge us up front but took his fee out of our bonus. I can’t say whether your bonus would be large enough to pay the fee though. Depends on many things, not the least of which is the size of your holding.
We were early lease signers and were paid accordingly… Per 20 AC what some say they are getting per single AC. That aside, I have other issues as a minority owner of a 160 tract, not dealing with drilling yet. Apache put in a road to access a neighboring lot. Without our permission. Now they would like to pay for the use of the land and for trespassing. I am not sure what is a reasonable amount they should pay me as a joint property owner. I don’t want to be unreasonable, but I don’t want to make a bad deal, again. They Are offering 40$ per ROD. Do I need legal help here?
Thank you for your response . We only have 5 acres. Are lease is at 1/4 royalitys . The section has not been drilled yet, it was divided up years ago in small sections . Are lease,is coming up we had one person say 5to 10k per arcre.
Do you own the land or the mineral interests, or both? If you own only the land, then you probably don’t get a bonus. We only have mineral interests, not the land, so I’m not terribly familiar with land issues. I think that $40 per rod sounds low from what I’ve read on this site. But don’t hold me to that! And I seem to recall landowners talking about negotiating clean-up terms in the contract, and maybe time limits as well.
If you do a search on the site, you can find posts about landowner issues. Probably you do need a lawyer but I don’t know if your payments would cover the cost. Of course, even if it cost you money, having a lawyer negotiate for you might save you a lot of grief in the long run, especially if you live on the land.
Thanks for responding. I own both land and minerals. Less land than minerals. the other owners are strictly in it for themselves, so I can’t work with them on a deal with the company. I have 12 AC of land more or less and 20 AC minerals. Some of the area is owned by the state. I have no idea what anyone else has negociated. One of the owners is a “lawyer”. I followed bad advice from a family member and signed a bonus deal on 2016 for very low money. Well, live and learn I guess. No drilling yet on the land. Section 39 block 13.
If you live in the same state you have small holdings in a potential mineral bearing property the first step to keep your investment as low as possible is to hire a Landsman to check your holdings out. He/She do not have the hourly rates of a lawyer, that being said a few are lawyers as well, check your holdings out. Be sure to get a quote from them on the probable costs for their employment.
Thanks Steven. I live in maryland and getting to Reeves TX is a big deal for me. I keep a pretty close eye on what is going on there electronicly, but I misses the creation of the cut off road, since GIS photos are not exactly current. I do have limited funds but I want to protect my assets. There are title questions I have regarding two of the land owners. They claim 1/3 of land that belonged to my mother, but I cannot find a record of her selling that to them. Only a document created by the “lawyer” in the late 1960’s claiming to own the property. Currently that is a document people making offers are using. I don’t know if it correct or not, but I don’t exactly fell confident about the " lawyer " guy.
Steven, Thanks for the advice! I hate to see someone profiting from my mother’s possible confusion! At a cost to my family members. On the other hand she may have sold some of her property to that guy… But I don’t see a record of the transaction in Texas Files. Only the state acquiring land for a substation and Hwy access. That reduced everyone’s percent of ownership since the property is an unsurveyed 160 Ac, except for the state owned part. At this moment it looks like that guy is trying to acquire 2 more AC of our land through what I would call a shaky deal.
Hi! We own both I have an offer 8k per acre 1/4 royalitys 3 year however they want 2 year extention
Low offer If you can, hang on to you mineral rights. Reeves County has oil that rivals Saudi Arabia. Rich, rich area. Also, NEVER SIGN A 2 YR. EXTENSION, EVER
I agree with Brenda. Bonus seems low. And like her, we never negotiate an extension. It is always a loser for the owner. If bonuses are higher by that time, the lessee will extend the lease under the lower bonus they negotiated in the lease. But if bonuses have fallen by that time, the lessee won’t extend the lease under that higher bonus. Lose-lose for the owner. Extensions also enable the oil company to drag its heels on drilling.
Keep in mind that bonuses and percentages are not necessarily the most important parts of leases. There are a hundred devils in the details. If you can afford an oil attorney, they are well worth the money. Our lawyer took his fee out of the bonus so we didn’t have to pay in advance. I can highly recommend him - Wade Caldwell. He is on this site.
Yesterday I called Caldwell’s law firm , after a 10 conversation I am going to retain there services.
An offer of $8k/pnma is not a terrible offer. That section was purchased by a real estate developer on sold as 5 acre tracts over eBay. Some folks who purchased are international. Difficult to develop that tract.
Yes, I think Centennial has most of the land and leased property in the section and are close to drilling