Exco Lease offer in South Caddo, Section 4, Township 15 North, Range 15 West

Hi all,

Been a few years since I've had to research a landman's mineral lease offer! Furthermore, I thought Exco was going bankrupt so how are they still acquiring leases!  Anyway, received an unsolicited offer of 1/4 royalty and $1000/acre signing bonus for our 10 acres in above section. Evidently Exco looking to put in a new well. Anyone familiar with the activity in this area and whether the offer is in the ballpark? Thanks.

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You might want to contact them new well just completed in April doing 10 million a day

Not in Section 4, T15N - R15W - what well are you referencing, specifically? 

 

T15N R15W section 4 completed 3/22/2018

250202   HA RA SUK;MUSLOW OG 8  001-ALT

The Muslow OG 8 001-Alt does not produce from Section 4. While the well is surfaced in Section 4, it only produces from Section 8, thus Les would not have much interest in this well unless he has a mineral interest in Section 8, in addition to his interest in Section 4. 

From what the landman told me, the well has not been drilled. It was to be a horizontal. Anyone know what signing bonuses go for these days. It has been years since I negotiated my last mineral lease.

$1000/acre is in the ballpark for current Haynesville leases.  If you had substantially more than 10 acres you might get $1200 to $1500/acre.  Hardly worth negotiating over when the royalty is right and all you need to do is get your Exhibit A attachment in order to cover the other lease terms.

Thanks for your input Skip.  No, I will not quibble over a few $ in signing bonus. As frequently discussed on this forum, the royalty percentage is far more important. I am going to try to negotiate a "no cost" lease.  With my current royalties so low, the transport and gathering costs consume a greater percentage of the meager checks. I know I used an example lease with such a provision off of this site years ago but I can't seem to find it now. If someone could direct me to a template with such language I would appreciate it.

One of the advantages of using an experienced O&G attorney is in the negotiation of a no cost royalty clause.  When you do it, it's an either or proposition.  You get it or you don't.  When my attorneys do it and the lessee will not grant a no cost, they are often able to either limit the amount of post production deductions or prohibit some and allow others.  G&T (gathering & treating) costs vary widely from operator to operator and field to field.  That type of negotiation is beyond the ability of land/mineral owners.

Where in Caddo Parish is this located?

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