Titan Operating expanded a unit in Colleyville, TX, and paid approximately $25,000 per net mineral acre. What is interesting is that the unit that was not part of the 2008 agreement that required a $25,000 signing bonus received today’s market rate of $4,000 per acre. Both agreements pay a 25.5% royalty. Quite a big drop to $4,000 from $25,000, but if you’re a landowner you have been at the negotiating table and saw offers drop in developing plays since 2008. In the Haynesville Shale, lease offers dropped from $30,000 per acre one day to less than $3,000 per acre the next during the beginning of the recession of 2008. You will only see $25,000-30,000 bonuses paid in special circumstances with today’s natural gas prices of less than $5 per mcf.
“The city will lease four tracts of its property to Titan Operating natural gas company, giving Colleyville a $702,000 boost from a signing bonus.”"Residents should notice no differences at any of the sites as the gas will be tapped through underground horizontal drilling based from Titan’s well site on Pleasant Run Road in north Colleyville. The City Council also has made no decision about how it plans to spend the bonus money. The amended mineral leasing agreement, which the council approved last week, will bring the total acreage Titan has under contract for city-owned property to almost 287.4 acres, said City Manager Jennifer Fadden.”
“Titan requested that the city ‘amend the legal description in the existing lease to include three additional tracts’ under the original terms of the agreement, Fadden said. Under those original 2008 terms, Titan will pay the city $25,000 per mineral acre in a signing bonus with a royalty rate of 25.5 percent once gas production begins.”
Read the complete news release at star-telegram.com