Our family is in the process of negotiations for our land to be used for Salt Water Disposal in Dimmit County, Texas. We are wanting a fair price for our land usage and Salt Water disposal and have received what we feel is a decent offer.
However, my belief is that this offer is a "starting point" and we want to be wise about what we should ask in return. We have been offered a "flat" monthly payment to use two of our acres to build and perform this for up to 10 years... In this process I have had some that have mentioned negotiating a per barrel price as well.
Our attorney is in the stage of reviewing our contract now so that liability issues and technicalities are settled and they are planning on getting a sampling of what other SWD contracts in this area are going for at this time. It is my desire to exhaust all options though and so I thought I would post on here to see if I could get anyone to help me understand the price negotiations on this particular process and/or what you may have received...
I know some of this may be sensitive information, so I do not expect you to post publically, I will share with you what our term proposal is if you would like me to either on here or via email... ANY HELP would be appreciated as we are about a week or two from having to settle on the financial terms.
Catarina... 2 miles N. I don't know anything about the "watercut"? I am pretty green on all of that lingo... but, I do know that we have been offered $1500/month flat rate, after production begins.
(DAP56, I believe I have started emailing with you already, but not sure?)
Hi Jeff. My company is now in process of negotiating for several sites in your area for operation of a salt water disposal facility as well. I would expect to pay a combination of some level of service damages per acre, a monthly fee, plus offer you a royalty on a per barrel basis, possibly on a staggered scale based on reaching various volume thresholds. The goal would be to strike a win win deal, where you would be happy and we could develop and run our business profitably. I will email you to discuss this opportunity offline. Thanks in advance for the opportunity to discuss this matter further.
Your email was sent into my SPAM file and was deleted before I could get it opened. If you wouldn't mind re-sending it to my pjwinrevival@aol.com address, I will be sure to look for it and respond asap.
Thanks...
BT74 said:
Hi Jeff. My company is now in process of negotiating for several sites in your area for operation of a salt water disposal facility as well. I would expect to pay a combination of some level of service damages per acre, a monthly fee, plus offer you a royalty on a per barrel basis, possibly on a staggered scale based on reaching various volume thresholds. The goal would be to strike a win win deal, where you would be happy and we could develop and run our business profitably. I will email you to discuss this opportunity offline. Thanks in advance for the opportunity to discuss this matter further.
Is the $1500 per month payment in line with what your company pays? What is the rule of thumb on the per barrel royalty? How does a landowner verify the actual volume in order to calculate money owed?
Thanks.
BT74 said:
Hi Jeff. My company is now in process of negotiating for several sites in your area for operation of a salt water disposal facility as well. I would expect to pay a combination of some level of service damages per acre, a monthly fee, plus offer you a royalty on a per barrel basis, possibly on a staggered scale based on reaching various volume thresholds. The goal would be to strike a win win deal, where you would be happy and we could develop and run our business profitably. I will email you to discuss this opportunity offline. Thanks in advance for the opportunity to discuss this matter further.
I just negotiated a commercial SWD well for $.25 per bbl for disposal. For the one well on site now, it is producing 600 bbl per day. That is $4500 a month off that one well to the landowner. They WERE paying $1.50 per bbl to haul the water.
It's all the same thing. However, with the high volumes of water being produced, your monthly rate should be higher. Let me make something clear. The oil company has the ABSOLUTE right to dispose of on lease water.
To dispose of off lease water, they need a commercial disposal permit from the RRC, which does take a bit of time and money on their point. BUT the agreement remains the same.
Thanks for the reply. I have someone looking at a commercial SWD well on my property. Just trying to make the best deal possible. Been told it may take 6 + months to get permit.
I went back on the blog and found this converastion. Are ya'll still looking for SWD locations in the eagleford play? I have some property in the play. Please email me with response dpurswell@lakecountryins.com
BT74 said:
Hi Jeff. My company is now in process of negotiating for several sites in your area for operation of a salt water disposal facility as well. I would expect to pay a combination of some level of service damages per acre, a monthly fee, plus offer you a royalty on a per barrel basis, possibly on a staggered scale based on reaching various volume thresholds. The goal would be to strike a win win deal, where you would be happy and we could develop and run our business profitably. I will email you to discuss this opportunity offline. Thanks in advance for the opportunity to discuss this matter further.