it is about 5 miles SW of Plains
same question as bob what is going on in Yoakum county? 450 an acre with oil at 33? really?
I don't know about a Boom in Yoakum county. I have had these mineral rights in Yoakum for 23 years and this is the first lease I have been offered. I wish more people were talking. I heard today that the lease amounts in my area (if offers are made) will be 300. If true, I should agree to the $450 I have on the table. I just wish I knew what others are being offered in my area , SE/4 section 130 block D
I just received an Oil and Gas Lease Option offer (contingent on resale to another company) good for $500ac at 1/5 Royalty on Sections 255, 257, 269, 315 and 329. I will ask for 1/4 and accept if they will do it. They plan to drill horizontally for 1 mile in the San Andreas formation. The Option holds me up from accepting other offers for 120 days. Any comments or thoughts on this kind of deal?
Steven, doesn't look to me as if the have any "skin in the game." You are asked to sit on your hands and do nothing while they negotiate a flip of your lease at a higher bonus, better royalty, possibly an overriding royalty...
They could just as easily offer you an option for $2,000 per acre, negotiate a flip at $1,500 per acre and come back to you and tell you they can only do it at $800 an acre.
I would not be interested in speaking with guys that are just "hustling" a deal.
We have mineral rights in this general area, and leased them about 4 years ago for 1/4 and $450. They didn't get a well drilled, so we leased again at the same terms. (Several others were getting $300 at that time.) So we have received a total of $900/acre so far.
Getting 1/4 is a big deal, and probably the most important factor to consider in these leases. We also negotiated a depth clause, post production deductions clause, etc.
Certainly you can always counter on the Bonus dollars and try to get higher amounts as we did at the time, but if there are good wells to be had, the bonus money will pale in comparison to the additional royalty you are gaining through the years by getting 1/4.
We have minerals in lot of counties in Oklahoma and Texas, and I can assure you that getting 1/4 royalty right now is a tough thing to do even in some of the better horizontal drilling areas.
Steven, as William stated, the person that is trying to lease your minerals with the bonus payment being contingent on them selling the lease is in a zero risk situation and is trying to make a quick buck. Further, giving them 4 months to find someone to flip it to could hinder your ability to find a legitimate lessee during that time. I would pass on that offer, or at the very least make them pay money up front for the option to take a lease in 120 days. Also, anyone that leases you for less than a 1/4 royalty will be pocketing the difference when they assign your lease to a third party.
Jolene, I leased my partial interests in sections 453, 454, 467, 468, and 537 over the last 3 years for bonuses of $550 - $600 with 1/4 royalty. Seven wells are now producing oil on sections 467 and 468. These are all in Block D, John H. Gibson Survey.
Jolene, since the play in Block D is still being developed and much of it is unproven, there isn't the same level of leasing competition that has driven prices up in counties such as Reeves and Loving, and there aren't many comparable lease offers being mentioned on this forum.
One way to maximize your offer is to do some research on the company that presented you with the offer to find out if they are a broker or the operator. If it is a broker, they are typically told by their client, the operator, what the maximum amount is that they are allowed to offer a mineral owner, per acre, for a lease. In my experience, the initial offer that you receive is typically not the maximum amount that a broker has been authorized to give. In a low oil price environment such as the one we are in now, brokers want to look good for their clients, ie, being able to lease as efficiently and cost effectively as possible; so you may have some wiggle room on the bonus if the offer came from a broker that didn’t offer the maximum authorized. If it is an operator that gave you the offer, your ability to increase the bonus may be somewhat limited depending on the size of your interest. In Reeves County, EOG has been holding their ground and not budging much, if at all, from their original offers on smaller tracts, even if it means they are going to lose the lease to a competitor.
While the above does not provide you with a definitive answer to what a competitive bonus payment is for your area, hopefully it is somewhat helpful. My guess is that the maximum you’ll be able to realize is 500-550/ac given the commodity prices and unproven nature of the area.
Even more important than the bonus payment is the lease form, and if you’d like to talk about that in greater detail, you are welcome to send me a message.
We are an operator in Midland Basin and looking for more minerals and leases. If you have properties there, please contact me directly. Thank you!
Ron Yang
Email: rshyang@haimo.com.cn
Cell: 832-858-8176
In response to some earlier questions, I would describe it as a leasing boom. Not a lot of drilling yet.
It seems to me that the leasing bonus offers per acre have dropped in price. Is this right?
Thanks for the feedback everyone. I passed on the Lease Option offer where the guy had no 'skin in the game' and went ahead and leased to an operator for $300ac on a 4 year lease and 1/5 RI. I know that is lower than in the past, but with this environment of lower oil prices, I am glad to be getting 'something.' Thanks again for all of your responses.
Need a comment regarding rate offered for saltwater pipeline. Offer is $100/rod with damages or $130/rod without crop damage protection. Is this offer consistent with what landowners are getting within the area?
While evaluating some acreage to be put up for sale, I noticed some very interesting experiments going on along the San Andrea front in Block D of the Gibson Survey. specifically Sections 505,506, 552, and my section of interest 551. I wouldn't be in a big rush to lease or sell in the next few months. Owners may be deluged with offers before long.
Gary L Hutchinson
Minerals Managment for Inherited mineral owners.
Hmmm. Just as mineral leases are being executed on some undivided acreage in Section 504 by my wife's Fillingim family....
Found a newspaper article today indicating that EOG is buying Yates(NM) and that they are interested in developing assets in the Permian Basin. Having turned down a renewal on small interests in 692 and 807 from Trail Mt(subsidiary of Yates), I wonder if EOG may be interested in actually drilling?
I may need a deed search in Yoakum County. Hate to drive all the way from Austin. Anyone out there know someone in Plains or close by that could do a fairly simple Grantor/Grantee index search for a reasonable fee.