TX Cooke & Grayson Counties Oil & Gas Lease Offer

New to this forum. I own inherited mineral rights in 3 Texas counties – Clay, Cooke & Grayson. Don’t know much about this stuff which is why I’m here.

I just received an Oil & Gas Lease offer from CRDTX LLC in Tyler. I spoke with the man and he explained that he has a ‘client’ who wants to drill on the Cooke & Clay properties. He said both plots of land are undeveloped at this point.

This is the first lease offer I’ve received since my mom passed 9 years ago. I have no clue whether or not it’s a fair deal. I would appreciated some guidance on this please.

Being a new user, I can’t upload the documents so here’s the deal they are offering:

-Oil & Gas Lease for 5 years, with option to extend 3 add’l years -Memorandum of PAID UP Oil & Gas Lease -Order of Payment

Proposed Lease Terms: -5 year paid up lease -10% royalty -$75 flat fee bonus consideration -mineral lease amount is $10 and OVC

50 acres of land in Cooke & Grayson counties. My ownership portion is 0.23

Thank you so much!

Without knowing anything about that area, the royalty and bonus amounts you’ve been offered sound very low.

If you are saying you only own an 0.23 acre undivided mineral interest in 50 acres, do you know who owns the rest of the minerals in that tract?

If you can, try to contact the other owners to find out if they are also considering an offer and are willing to share information with you and possibly work together on leasing.

1 Like

Never lease two different properties on the same lease. The lease royalty is low. I would never lease for less than 1/8th and would prefer 25% in Texas, but that varies by what they are drilling for. I also prefer a three year lease. Five years is too long for me. And I would never go for an option. The five years plus the option for three implies that there is no rush to drill here. The option is only to the operator’s favor and not yours.

Do you have .23 ac or do you have 23% of 50 total acres?

1 Like

Thx for your reply!

I own 0.23% net mineral acres out of 50 acres in Cooke & Grayson County. These were inherited mineral rights from my Paternal Grandfather. My two living aunts have their 1/3 share from my grandfather. My mom is deceased so my two brothers and I split her share. I have no idea who the other owners are

I thought the offer seems liked pennies on the dollar. I don’t think it’s worth a lot of money but this seems like it’s in the lease operators favor, not ours.

It’s way confusing having the properties in two seperate counties in one lease – makes it messy.

I appreciate your expertise. Thanks for taking time to respond.

Thanks so much for your expertise! Everything you said resonates and makes perfect sense.

I own 0.23 net mineral acres out of 50 in Cooke & Grayson County combined. It’s an inherited split between my two living aunts and my two brothers and I.

When you say you would never lease for less than 1/8th what does that mean?

They are offering a 10% lease which is the lowest that I have ever heard of. Most minimum offers are at 1/8th which is 12.5% royalties. I cannot make sure your math is right without reading the documents, but from what you said, your aunts and mom would have each had 1/3 of 50 acres. So 50/3=17.33333333 ac each. If you split your mom’s another three ways that is a 33.33333% (not .23%) of 17.33333333 acres which is 5.77777778 acres.

How that 50 acres is split is dependent upon the title documents. DO not lease those two counties together as it could cause nightmares for taxation, etc. If they drill in one, but not the other, you would tie up the non-drilled one and not be able to lease it independently if they are done together. If you share the abstracts of interest, then folks may be able to help you with the activity nearby.

1 Like

Ok, that’s beginning to make more sense now. Thank you for that detailed explanation!

Does this info help? (from the agreement):

  1. Joshua Woodfin Survey A-1297 Grayson County
  2. A-1088 Cooke County (not sure if this is under name of W R Bates OR my ancestors Roy T & Glennis Lynch/Frank Wilson.

50 acres total in both counties and I will NOT lease it together. This lease offer is beginning to feel super shady. Appreciate your expertise.

I just checked a source and for the Grayson county leases where the royalty is listed, the minimum in the last two years was 15% royalty and the rest were at 3/16ths which is 18.75 percent. The rest of the leases filed were Memorandum of lease which does not post the royalties.

A-1297 was last leased in 2020 and for the ones I can see, the royalties were all 18.75%.

A-1088 is right across the county line. (Thought that might be the case) Again, the ones I can see have a royalty of 18.75%. XTO (Exxon) was amending leases back in 2021. I won’t even lease different tracts in the same abstract together. Always, always, always keep them separate.

I still think the royalty is too low at 10% and I would not do it. I would not lease for less than 18.75% (3/16ths) and only for three years. The draft lease they will give you is not in your favor. If you and your siblings and aunts can work together you will get a better deal as the landman wants all of the acreage leased. I advise getting a good oil and gas attorney to look at the draft as it will need some serious edits! Several are listed in the Directories tab above.

1 Like

Interesting, so the plots are close to each other geographically? Did I understand that correctly.

How was their a lease in 2020 when I or my relatives were not aware of that? Is this a common situation? This is the first correspondence we’ve received on these plots of land since my mom passed in 2015.

Very helpful information – thank you!

I will talk to my brothers and find an O&G attorney from the resource page.

I have an oil lease from that same company in my hands today actually…I also inherited mineral rights and have 10 acres and they offered same as they did you previously and we ignored them and now they offered 3 year paid up, 10% royalty, $200 per acre bonus

1 Like

There can be hundreds of owners in a section. If the title information is not filed in the county, then the landmen cannot find you. Or the landmen were told to lease a certain percentage and given a certain basket of money. When it is gone, then they just move onto the next project.

Wow! Very interesting that you ignored them and they came back with a better offer for you.

Is your property in Texas – Grayson County?

Thanks for sharing your experience. Might be beneficial for us to ignore them too LOL.

It looks like Grayston County doesn’t provide free online access to their deed records but if you can’t make it to the courthouse you can use a commercial on-line service like TexasFile to get a copy of the deed you are wondering about. At TexasFile setting up an account and searching their deed indexes is free but it will cost you $2.00 to look at the deed or $3.00 to download and print it.

I think the one you are looking for was dated 7/6/46 and recorded in Volume 509, Pg 44. Check it out and don’t go by what I say but I think you’ll find Roy T. Lynch and wife Glennis, along with Frank Wilson, sold that 50 acres to W.R. Bates. But the sellers retained only half the mineral interest and that half was split equally between the Lynch’s and Frank Wilson. If that’s right the mineral interest you and brothers each own would appear to be a 1/18th undivided interest in the 50 acres, or about 2.8 net mineral acres out of the whole tract, rather than a specific part of it.

It also looks like that full 50 acres is only in Grayson County. The same Woodfin Survey, that’s called Abstract 1297 in Grayson Co., does extend into Cooke County, where it’s called Abstract 1088, but the west boundary of the 50 acres appears to stop at the boundary line between the two counties.

In your original post you said the recent offer you got also covered mineral interest you own in Clay County. If that’s true then two separate tracts could be involved since Clay County is further west and doesn’t join Grayson or Cooke County.

1 Like

The “royalty” you are offered is one of the terms in an oil and gas lease. It is, simply stated, the percentage (or fraction) that you would be paid from the oil and gas that is produced. So you want the “royalty” to be as large as possible. When M. Barnes said she would never lease for less than 1/8, she is saying that she would never sign a lease that provides for a royalty of less than 1/8. Frequently, oil and gas leases provide for a royalty that is greater than 1/8, and sometimes much greater. I apologize if this information is too basic; I don’t intend to be talking down to you.

1 Like

I also have mineral rights in Cooke county and I I have also received a lease from CRDTX. It is in the Woodfin Survey . The lease they proposed was for 3 year and 10% royalties and $250 an acre bonus. I have 19 acres. I had this leased by a different company in 2017 for 3 years and 15%royalties at $$250 acre. So I know the royalties are too low on the proposed lease but shouldn’t the bonus be higher now… considering the price of oil is much higher now than in 2017? Has anyone ever heard of CRDTX??

1 Like

Thanks for the response and the information. I misspoke about Clay County Mineral Rights, which are not included in the proposed lease offer.

Thanks for sharing this information! We’ve made them a counter offer which includes a $200 sign on bonus for a 3 year lease with no renewal option. Waiting to hear back if they will accept the counter.

Appreciate knowing about the offer you received on the same Woodfin survey.

LOL, I don’t know much about this stuff and appreciate the guidance and expertise in simple terms. The O&G Industry seems rather complicated to me.

Thanks for your reply!

CRDTX is a company used by Trailhead Exploration. They are trying to drill horizontal Woodford wells as they have done across the river in Oklahoma. The play extends into Cooke and Grayson, just hasn’t been developed yet. They mailed out those offers to everyone in the trend area hoping to get some bites on 90% leases. Not a good offer. With that said, woodford wells in this area are very expensive and probably warrant them receiving better than 75% lease. Never heard of a 10% royalty lease in any capacity and I am very familiar with the area.

I’ve always leased the mineral rights I have in Cooke County to whoever sends me a letter. It’s always a different company each time and it’s always a 3 year lease. This time CRDTX…We settled on 3 years, 12.5% royalty and $325 per acre. I don’t know if this is good or bad. It’s free money I can use :man_shrugging: