SWD Revenue, Permian Basin

We have been offered to place an SWD on our property. My spouse feels the offer is a bit low at 8% of all profits.
We are in the Permian Basin. Any help is greatly appreciated on what the typical take home for land owners would be in this area for an SWD.

SWD can be profitable, but it depends on the terms of the document. Are you really being offered 8% of the profits, meaning the gross income less expenses? Or 8% of the gross revenues? If you are after-costs, then is depreciation for the equipment included? You should have an attorney who is familiar with SWD wells review the agreement before your sign.

We will likely take this to our attorney. My husband said profits, and that it may be more reasonable if it was 8% of gross revenue. We have experience in many of the industry dealings, but not SWD. Just wondering if anyone is familiar with the area and knows what the “going rate” is for these types of leases.

I would negotiate anywhere from .25 cents to .50 cents per bbl.