Questions for Skip Peel and Les B.

Skip,

I have followed your posts through this website since I have land in Caddo Parrish.  I am hoping you can give me some advice.  I also have land in Walker County located in southeast Texas.  I was contacted by a landman yesterday wanting to lease my property there for $50 acre and 1/6 royalty on a 3 year lease with a 2 year option.  Obviously, this is not anything like what is being offered by oil companies in Louisiana, but my dad leased this property 20 years ago for $100 so I am thinking $50 is not appropriate.  Today the same landman came back and offered no bonus on a one year lease with 1/5 royalty.  I know you are probably not familiar with the area, but can you give me any advice.

 

Thanks!

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Permalink Reply by Skip Peel - Mineral Consultant on February 6, 2010 at 17:34
Mary.

I suggest that you take a trip to the county Clerk Of Courts office and examine the Day Book.
Permalink Reply by Spring Branch,mineral owner on February 6, 2010 at 21:06
IF I were going to lease for one year and no lease bonus to encourage a wildcat well (and I'm not saying I would), I would accept no less than 1/4 royalty.
Permalink Reply by jerry smith on February 7, 2010 at 3:17
Mary are you talking about richards texas at fm 249 area and fm 1791 if you are there is some big wells they have been hitting since 2008. i konw this because i was in the area up until 2009 and i seen some hell of wells being drilled. that is a old area of a play in grimes county

give me the survey number and i will let you about the area. ps good luck
Permalink Reply by sesport on February 7, 2010 at 3:36
jerry - Could you please clarify something? When you mention "some [heck] of wells being drilled," would you mind giving us some well names, maybe some production numbers?

Much appreciated - 80)
Permalink Reply by jerry smith on February 7, 2010 at 4:00
there was a well drilled at the corner of 249 and 1791 at the feed store there i dont remember the well name but it was a well doing in the mm cf a day . they had to flare it off for 30 days i know because i was working the area . the only way i can help is give me the survey you own and ican tell you what you have
Permalink Reply by Skip Peel - Mineral Consultant on February 7, 2010 at 4:19
Mary.

One of the challenges in valuing minerals is knowing the nature of the industry interest in your area. More specifically what formation or formations they believe to be productive. Not all wells are shale wells. Even those that produce an MMcf a day. A good Travis Peak well can produce a MMcfd. A Cotton Valley well 2 - 5 MMcfd. Other than the fact that it is producing gas, a well flare means little. The shale not only produces exceptional wells, it's consistent and contiguous nature almost precludes the risk of a dry well. That is why it is highly valued. I suggest that you get as much factual detail on the area of your minerals as you can and get that information from several sources.
Permalink Reply by sesport on February 7, 2010 at 4:24
Add to that ... several RELIABLE and VERIFIABLE sources. 80)
Permalink Reply by jerry smith on February 7, 2010 at 5:01
sorry mary it was at 1486 and 249
Permalink Reply by jerry smith on February 7, 2010 at 4:28
mary here the ip number of the well i was talking about API - 185-30722 that is southern bat operator that doing all the leasing in the area. That area is the Austin caulk and they are drilling horizontal in the area and hitting some big wells . i would not lease for less than 25 / 2 year lease . no option I was working on some wells in 2007 thur 2009 and it is a great play and a tight hole. so dont be fooled by other plays that are going on. this is almost as good as the haynesville
Permalink Reply by Les Bamburg on February 7, 2010 at 4:24
Mary, Walker County has very limited activity as there have only been eight new drilling permits in the last two years. County gas production is about 2 million cubic feet per day (2 MMcfd).

I believe your reference to Richards, TX would be the eastern edge of the Austin Chalk play (Giddings Field). This play has been around for a long time and small operators continue to drill some decent size infield horizontal wells with a few testing as high as 6 MMcfd.
Permalink Reply by jerry smith on February 7, 2010 at 4:43
your wrong the play is to the west north west if you go to east that is walker county, i know the area very well and the play is not to the east it to the west. besides they can hold information on a tight hole i know i work there
Permalink Reply by sesport on February 7, 2010 at 5:04
jerry - Mary DOES mention Walker County.

Reply by Mary Wood 14 hours ago
I have heard they have had a big hit in Richards, Texas which is on the edge of Walker County.

80)

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