Gas Royalties Question??

[quarterback]

Assumptions:
They drill and complete a gas well, forming a 160 acre unit. Let's say you leased for 20% royalty (proportionately reduced) and you own 1/2 acre. Assume the well makes 1 million cubic feet of gas per day (average) for a while. Your interest is 20% of 1/320th. Gas price is...oh, say $4.00/mcf (a little high but wth). The well grosses $120,000/month. Your 1/320th x 20% = $75/month in income. I think my math is right but someone double check me.

[stinkbelly]

We signed the original lease and got something like $2000 for 22 acres in Parker County. I took it to an oil and gas lawyer and he said at the time he had never seen an offer so high. They went through the first 3 years and then paid to renew if for two additional. That has expired and we are signed with no one currently.

We were promised two wells on my land and tons of money per month and now we have nothing. If I were you, I would sell that little amount you have. Honestly when you bought the little lot, you never thought you would have mineral rights anyways.

[Bowtech2004]

May be best not to sell your royalty interest. If they lease it two more times you'll get more than you would if you sold out, not to mention the income from a gas well if your land is part of the unit. Prices are definitely down right now but shale gas is here to stay. Keep your minerals and ask for more royalty next time they offer to lease from you.

I think 25%

[Bowtech2004]

What's your percentage?

25%

[Philip-TX]

You need to check what you signed...

Probably 3 yrs to start drilling, Didn't start drilling in the 3 yr, so another 3yr was signed.

As mentioned the drilling process has many stages including completion, and shut it. Check the clause in your lease. Our site is wrapped up in city politics and permitting.

Once production starts is when the royalties come into play, check you lease for what you'll get, (20%, 25%) based on your small holding in the site probably would be any great windfall.

You really need an O&G atty to look at it for you.

Is you lease for gas only? Specific depths, etc ?

You need to be clear if the offer is for the royalties or mineral rights.
I'd never sell the mineral rights, OR the royalties. IMO

[quarterback]

At 25% royalty your interest would yield about $94/month under the scenario I previously posted.

[terryr]

If you alredy own the mineral rights IMO if they drill and start pumping even if you get $50/month that is still $50 more than you have now. If you sell it then you get $2500 once and thats it. I would rather get $50/month for a few years than $2500 once.

[txnduckhntr]

never give up your minerals, no matter how small.

[kyle1974]

the other thing to consider is you're selling your mineral rights at an absolute low... there's really no where for the prices to go except up. It's at a historical low

[lameduck]

25%

Mind is 1/16. Gas is so cheap right now the postage is bigger than my cheack.

[perfectstorm]

never give up your minerals, no matter how small.

This! Duh!

Don't be like the idiots who call Peachtree just because "It's your money & you want it now!". A bird in the hand is NEVER worth more than a bird in the bush when it comes to mineral rights.... Unless your about to be destitute or something. Then still my advice would be to wait a second because if you have buyers wanting your minerals- then you are about to not be destitute. DON'T SELL!

Everyone else- pray & vote for a different President, then maybe the checks will outweigh the postage!