It is my understanding that it takes a lot of water for fracing, and the cost for Lessee to haul water in is pretty expensive. Since water in Texas seems to be becoming a more rare and valuable commodity with the severe drought we are experiencing, what would be a good price to negotiate (when leasing) to be paid per barrel of water used by Lessee in its drilling and fracing operations (from a metered water well drilled by Lessee on Lessor’s land where the drilling location is situated)?
Dear 6GT,
Like all lease terms, this is a negotiated position. I do not want the Lessee to use water from my streams or tanks, only drilled water wells that they return after operations.
I try to begin at $3.00 per foot of hole drilled, both in the vertical component and the horizontal component, rather than a metering system. For example, a 10,000 foot vertical leg and a 5,000 horizontal let, equals a payment to the landowner of $45K.
I would love to hear what other parts of the country are negotiating.
Thanks Buddy. I look forward to other discussions on this topic.
Buddy Cotten said:
Dear 6GT,
Like all lease terms, this is a negotiated position. I do not want the Lessee to use water from my streams or tanks, only drilled water wells that they return after operations.
I try to begin at $3.00 per foot of hole drilled, both in the vertical component and the horizontal component, rather than a metering system. For example, a 10,000 foot vertical leg and a 5,000 horizontal let, equals a payment to the landowner of $45K.
I would love to hear what other parts of the country are negotiating.
Best,
Buddy Cotten
Mineral Management
What is the going price for water if it's sold by the barrel? This is in Noble/Logan co., OK where it's been dry and most of the ponds are real low.
Also,
Does anyone know damages are going for in this area? for H & V wells?
I have seen 2 contracts recently in Mitchell county in west Texas and they both had $.50 per barrel for water. This is not in your area, but thought it might help you giving you at least some basis. I do not know if this is the going rate for water in Mitchell county, but I assume it is typical in the area. Best of luck.
Robert,
Thank you. They offered 20 cent a barrel and I thought that was 1950 prices. I have a pond in my meadow that is 26 feet deep and covers several A, plus it has a spring. So, I have sold some for fracking, but they plan on drilling a lot more wells in the area. I have been told that it takes as much as 300,000 b for an extended Horizonal well.
Buddy,
On a prospective lease with a company, we have $1.50 per linear foot (not depth) of the oil, gas or other mineral well drilled. The prospective Lessee wants us to either remove the clause altogether or come down off that price. I see by your comment you start negotiations at $3.00 per foot. What's the lowest amount you would go?
Buddy Cotten said:
Dear 6GT,
Like all lease terms, this is a negotiated position. I do not want the Lessee to use water from my streams or tanks, only drilled water wells that they return after operations.
I try to begin at $3.00 per foot of hole drilled, both in the vertical component and the horizontal component, rather than a metering system. For example, a 10,000 foot vertical leg and a 5,000 horizontal let, equals a payment to the landowner of $45K.
I would love to hear what other parts of the country are negotiating.
Best,
Buddy Cotten
Mineral Management