We have mineral rights on a small portion (13 acres) of a 320 acre tract in the S Miller and Howard surveys. Cabott is offering $1000/acre and 1/4 royalties for shallow drilling rights, three years. We are also in contact with EOG and expect a counter-offer shortly. Are these terms in the normal range based on current conditions? We have an additional Cabott in the immediate vicinity with a lease expiring within the year. Any advice and opinions welcome.
In today's market I would take this offer to the Bank especially with 25% royalty and shallow rights only which I assume you talking depth to maybe only to Cotton Valley. Your money is in ground possible oil play--- you want them to drill-drill-drill NOW.
JR, I received the same offer from Cabot about a week ago in the Thomas A. Martin, A- 194 survey, just north of you. The lease was depth restricted from the surface to the Pettet. I personally think it is an attractive offer, but if EOG is willing to offer better terms, I'm willing to listen. Let me hear if EOG makes an offer, please.
Spring Branch ...received $1250 offer, 1/4 royalty from an independent. This will probably be the last offer.
Thanks to all -- additional comments still welcome.
Spring Branch, we are still waiting to have followup contact from EOG. The holiday weekend may be throwing things off. I will update next week if we have additional offers to consider.
Cabot or EOG both great companies to lease with today for they both have the money to drill the wells!!! Sounds like it's a Horizontal Pettet oil play. If good well they will have EUR of 100,000+/- BOE That's very commerial ROE to drill these relative shallow wells especially with oil >$90
Devon is going for James Lime oil currently. Apparently there is oil in the Pettit formation as well due to their lease agreements stating the bottom of the Pettit formation. Looking at quite a few wells in existing units east of San Augustine as well at approximately 10 to 20 new units traveling east into sabine county.
i wish eagle oil would do something on our property east of san ay ugustine been there 3yrs and they have not even tried to do any thing and our lease rundm s out with them in 2013 we will most likely go with somrbody else. j.h.