Replies to This Discussion

Permalink Reply by Michael on September 28, 2014 at 9:37

I received a lease offer of $350 acre bonus, 25% royalty, 3 year primary term. How is this comparing to other offers in this location? Anyone getting a better deal?

Thanks,
Mike

Permalink Reply by North LA on September 28, 2014 at 10:18

What's your township/range/section?

Permalink Reply by mt "bee" meadows on September 28, 2014 at 10:30

In Lisbon & Antioch Fields, T21n R4&5w and 22n - 4&5w  abt yr 2000 best offer  was $200, 1/5, 3 years. I'd go for your offer and if it was WHR I'd try for 18 - 24 months and settle for a lot less bonus.. Bring on  the  RI

Permalink Reply by Michael on September 29, 2014 at 3:09

section 3, twp 19n, range 7w.

Pardon my ignorance, what is the benefit of 18-24 month term?  Yes it is Wildhorse Resources, and what is RI?  

Thanks for the info......Mike

Permalink Reply by mt "bee" meadows on September 29, 2014 at 6:13

Michael I'm a novice too but should  quote what I learned from wise comments on this blog.

By what ever means, search, asking, interviewing, employ an attorney making a practice dealing in oil and gas business/contracts.

Your specific questions:

RI = Royalty Income, payments an oil/gas company (=operator) pays a mineral owner for mineral product from the operators well on your property.

Why 18 - 24 months = I'm thinking that offer is from WildHorse Reasources (WHR). They work fast, so 18 to 24 mo from permiting  to completing the well is sufficent time cause I want WHR  to send division orders and begins paying me RI.

Permalink Reply by obed w odom on October 7, 2014 at 3:20

Michael,

It looks like your property is in what Wildhorse considers a very prospective area for horizontal Cotton Valley wells. You are 6 miles due west of Wildhorse's permitted Harmon 3-34 HC well and about 3.6 miles northeast of the Nadel & Gussman  14000' Seward-Gandy vertical well in section 29-19N-7W, which was rigging up last weekend.

Like Bee, I think your offer is a very good one.

Permalink Reply by obed w odom on October 7, 2014 at 4:54

There is  a typo in my message above. The Seward-Gandy well is in 20-19N-7W.

Permalink Reply by Michael on October 7, 2014 at 11:39

I sent an email to the landsman a little more than a week ago accepting the offer but asked for 2 instead of 3 years.  I haven't received a response.  Do you think I should just go ahead with the 3 year term or wait for a response?

Permalink Reply by Skip Peel - Mineral Consultant on October 7, 2014 at 11:45

Michael, the offer is a good one. The bonus and royalty are fine. And a three year primary term is common and acceptable.  Your attention should be on the lease language.  If you do not understand it, get help.  There may be terms worth negotiating over but the primary lease term is not one of them.

Permalink Reply by cpj on October 12, 2014 at 4:18

Move in on Harmon 3-34 has started. Drill pipe and auxiliary equipment so far. No heavy iron yet.

Permalink Reply by obed w odom on October 12, 2014 at 6:43

Thanks, cpj. Looks like Wildhorse is not wasting much time. Do you know who the drilling company will be for the Harmon 3-34?

Permalink Reply by cpj on October 13, 2014 at 9:34

Looks like Noble.  Blue and yellow iron.  Think its coming out of Leatherman Creek area, but that's a guess..  Late yesterday mud tanks and triplex pumps arrived.

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