Through inheritance I now am the proud owner of mineral rights on 1.5 acres in abstract 238 Leon county. I was offered $8800 to sell then negotiated to$15,000. Sun Valley has offered $500 per acre lease and 20 percent royalty which i have negotiated to 22.5 but holding out for 25. Does anyone know of any pending activity here or have any suggestions.
1 Like
Comstock has leased about 500 acres in the JW Dodson A-238 Survey. In addition, they recently permitted a well, the KN Jensen 1H, in which the lateral is planned to run into the northeast quadrant of the Dodson Survey.
You said you had a lease offer from Sun Valley…was it actually Surprise Valley? They’ve done a lot of leasing for Comstock in Leon County.
Assuming your acreage is not in the unit for the Jensen well, there is still a good chance it could be included later when infill drilling takes place. The fact that you were offered $15,000 for your 1.5 acres suggests that it is likely.
Here are some ballpark numbers about your royalty potential. Comstock’s first well in this deep gas play, the Circle M Allocation 1H, has produced about 18.9 billion cubic feet of gas during its first three years of production. The reported gross revenue from gas sales is about $66.7 million. A 25% royalty would be $16.7 million. The unit is 1,150 acres, so if your 1.5 acres had been included, your share of that royalty would be 1.5/1150, which equals almost $22,000 in three years.
Keep in mind that there are no certainties. Your 1.5 acres may never be included in a unit, gas prices may drop, etc. In addition, production drops off steeply after the first year, so royalty growth will be much slower.
One last comment: It is an absolute necessity to get a cost-free royalty in this play. Comstock controls the pipelines and the treatment facilities in this area, and the marketing costs are currently running about $1.07/MCF with the realized gas sale price running around $3.00/MCF. Without a cost-free royalty, you will lose about 33% of what you could have had, and you don’t want to do that!
Good luck! By the way, other mineral owner have negotiated 25% royalties with Surprise Valley. If they push back, just point out that your 1.5 acres is tiny and unimportant in the overall financials.
3 Likes
You can easily get a 1/4 royalty and a minimum of $1,000/net. mineral acre for a 3 year lease with no options. A cost free royalty or as near to it as you can get. If they don’t lease it someone else will and you will get your price. A good lease form is a must. Hang tough! Good Luck. Get a cashier’s check when you lease it, DON’T SELL
2 Likes
I have a lease with Surprise Valley that ends at the end of this year. I may be included in the big horizontal wells that they have recently drilled South of Jewett. My lease (that I inherited) is for 20%, and I would love to get that to 25. Assuming that they will need to renew the lease due to no production yet (may not happen), who else could I negotiate with to up the %. I spoke to the landman for my mother, and asked for 25% but was told no. I figured my measly 58 mineral acres weren’t enough to negotiate with but it seems I was wrong.
What abstract is your lease for?
A. Jackson. Is that correct? I don’t know proper terminology.
Currently Comstock has a few Horizontal wells being being drilled in A. Jackson (A-437). The Brown Trueheart BB (api# 289-32203) well and the BlackBurn BW well (api# 28932202) are located in that abstract. Another well, Hutto Rodell (api# 289-32198) crosses the abstract. You definelty want to keep an eye on these. Looks good from what I can see so far.
There are now 2 new wells on that abstract A-437. New permits for the Jones LA and the Lotspeich BJ were just submitted on the TRRC site. That’s 4 wells now plus the one that’s crossing it.
Hi, I also have rights in A-437. Did you say earlier that you made visual contact of platforms on the premise? I live Fort Worth and would love to drive down and see them too. Let me know if you can provide the locations. Thanks.
I have not seen if they are drilling wells on A-437. I do not have minerals on that abstract so I have not looked. Sorry about that.
You stated that Comstock has a few horizontal wells being drilled in A. Jackson ( A- 437 ). Can you confirm that? Then you said " I have not seen if they are drilling wells on A-437. Can you explain?
I had allowed Surprise Valley Resources to lease inherited land but l don’t know much about it. My dad died and l inherited his property. Not sure what steps to take to make sure l’m getting correct dollar amount while leasing. I really need some help with learning in and outs of leasing land. I never plan to sell, because l want this land to go to my children.
Thanks for that post, will you elaborate a bit more on the sites in A-437, Brown Trueheart BB api#289-32203 and BlackBurn BW api# 289-32198. I am interested in platform verification, how far along they are, etc. Any additional information would be appreciated. Thank you.
my property is to the east of 32202 at the bottom of the abstract going north. if you see where county road 325 runs along the bottom f the survey, that little lake to the north is on my property. I posted my plat earlier, but it is waiting for approval. I really appreciate you helping me and others out here.
I just saw the note about the new permit that just came up on TRRC. I am in a pool there!!! Any expert opinion on how long until production will begin?
Very nice! It seems to take a year from spud to production. Give or take a month or so.
1 Like
There are two rigs in place about a mile apart on CR 325 coming from Jewett. I was there yesterday. The rigs went up months ago. I live in Bryan so it is an hour drive for me to go check. I went yesterday, and they have began clearing the pipeline right of way. When I went a month ago there were signs up for the right of way crew’s access points, but I didn’t see clearing yet. I am trying to figure out if my property will be included in a pool. The best I have figured is I touch one of the ones that have been listed. I am going to post my plat and hopefully one of the kind folks here can help me out as I know nothing of this field, just a rights owner.
1 Like
Thanks Mr. Williams!
Every well is different, but a general guide for royalties is about a year from when the well is spud (begins drilling). Takes about four-five months to drill a long horizontal well, then one has to wait on the frac crew to complete the well and put it onto production. Takes another four-five months to get your Division Order. Once you sign, then payments begin.
3 Likes
thank you so much. Those of us whose heads are spinning in this field are grateful for you generously sharing your knowledge.
2 Likes