landowner

Section 29/ N15/W14 Lease option

I am being approached by Chesapeak to lease In this section -  they are only offering $900/ acre and 19%  I think this is pretty low.  Am I having too much expectation? 

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 4, 2022 at 10:38

You're welcome Bill.  Pardon the rant.  LOL!


Oil & Gas ProPermalink Reply by Ben on March 13, 2022 at 10:02
Skip, I’m a big fan and with all due respect, he didn’t write a one-nineteenth royalty on the lease offer. He indicated 19 percent. Quite possible.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 13, 2022 at 10:07

Ben, I think you misunderstood.  Although any royalty percentage is a possibility, I've never heard of 19%.  There are a number of common royalty fractions traditionally used in O&G leases.  The one that I think he was referring to is three-sixteenths which is 18.75%.


landownerPermalink Reply by RONNY on March 20, 2022 at 1:46

I recently leased a 3 acre tract in 15n 14w sec 29 for $2000 acre and 22.5% cost free royalty.  I am satisfied with that but have heard of higher amount being discussed on a larger over 30 acre tract.  Although previously leased many folks in this section were able to lease again due to lack of production and no shut in payments.


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 20, 2022 at 1:53

Congrats, Ronny.  Those are very good terms.  So unlike Chesapeake especially for a section that was fully developed for the Haynesville a couple of years ago.

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