Smith County Texas Lease Offer Rates?

Oil and Gas Leasing Help
1

I was recently contacted about leasing a property I own in Smith County, Texas in the Chapel Hill area. Anyone know what the going bonus and royalty for that area is? I would be interested in hearing if you have been contacted, or have information regarding this area. Thanks!

2

C. Patrick: The best way to determine bonus amounts is to find out if individuals in neighboring areas have recently leaseed. The area you described is the Chapel Hill field which is made up of older oil production and some newer gas production. Due to the past inactivity in the area, don’t expect a large bonus in this area as whoever is leasing is possibly doing some exploring.

3

Thanks for the information. I made this post hoping that other land owners in Smith county might have some information. The landman said that they were leasing up to drill for oil, and I noticed on the RRC website that a new permit had been approved last month a couple surveys away from my property. What is the range of bonus and royalty to expect in this type of area.

4

C. Patrick:

I'm sorry that I can't help you in the area of bonus rates. My suggestion would be to talk to individuals who have acreage near yours. First, let the landman make his offer and keep in mind that he has a ceiling price so I would tack on several hundred per acre in order to learn his limit. Be sure to limit your lease term to 3 years and I would negotiate for a 20% royalty but not sure what the royalty % is for this area. As I said earlier, the oil wells in the Chapel Hill area are older wells and the newer wells are gas. With oil at a premium price, I guess that exploration in an old field is feasible. Good luck and take your time in order to get the best lease.

C. Patrick said:

Thanks for the information. I made this post hoping that other land owners in Smith county might have some information. The landman said that they were leasing up to drill for oil, and I noticed on the RRC website that a new permit had been approved last month a couple surveys away from my property. What is the range of bonus and royalty to expect in this type of area.