landowner

land lease

i have been offered 150  dollars an acre and 1/4 royalties for a 3 year lease on property in section  8,  Caddo Parish, Louisiana is that the going rate ? thanks for your time kenny

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Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 28, 2013 at 9:21

kenny, there are many Section 8s in Caddo Parish.  One in fact in each and every township. What is needed is a section-township-range description that would look something like this, S10-19N-16W (Section 10, Township 19 North, Range 16 West).  If you don't have that information you'll need to provide a description based on something else like the intersection of two roads.


landownerPermalink Reply by david kenneth merritt on March 28, 2013 at 9:24

 thanks for your guick response the description is  Section 8,  T23N-R15W, Caddo Parish, Louisiana . thanks again kenny

 


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 28, 2013 at 9:26

Is the company offering the lease J B Land Services?


landownerPermalink Reply by david kenneth merritt on March 28, 2013 at 9:28

Cypress Operating ,

 is offering  $150/Ac with 1/4 Royalty for a 3 year lease. 


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 28, 2013 at 9:37

Cypress Operating recently completed a horizontal Pettit Lime well in S4-23N-14W.  There are other companies exploring the Pettit with horizontal wells. but they are further to your east.  The Cypress offer is in the ball park but if it were me I would ask for a little more bonus, say $250.  The royalty is more important and high for an opening offer at a quarter.  What's most important is getting good lease language along with the quarter royalty.  You'll need a standard vertical Pugh clause to limit the lease to the depth produced.  Not drilled.


landownerPermalink Reply by david kenneth merritt on March 28, 2013 at 9:45

i appreciate your expertise may i foward you the lease agrement to read , if so are there a cost


landownerPermalink Reply by adubu on March 28, 2013 at 10:00

david---- how many net mineral arces you have to lease to them?


landownerPermalink Reply by david kenneth merritt on March 28, 2013 at 10:02

11.7


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 28, 2013 at 10:55

david, I am not an O&G attorney.  An experienced  O&G attorney can review your lease and suggest any changes or additions.  It's worth it even for 11.7 acres.


landownerPermalink Reply by adubu on March 28, 2013 at 9:57

Skip--- with 25%R and all the good language -- what you want is for them to DRILL and bonus only $150 that's low to hold your lease for 3 years. I think I would ask for only 2 years lease wanting them to drill unless bonus higher-- 150 Cheap to hold minerals for 3 years


landownerPermalink Reply by david kenneth merritt on March 28, 2013 at 9:59

thanks for the reply

 ken


Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 28, 2013 at 10:36

That's why I suggested asking for $250.  Cypress is a small local operator.  They might pay $250 and accept the lease language.  With 11.7 acres david has little bargaining power.  You can always ask, that's true.  If I was offering the lease it would take me all of a half second to say no to a two year term.

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