Terry County Commissioners met Monday to hear from Assistant County Attorney E. J. Garcia who informed members about the latest concerning a proposed oil and gas lease.
Last month Garcia submitted a lucrative proposal to commissioners from an undisclosed energy company, which offered $750 an acre for Terry County public school lands located in Gaines County . Other proposed terms to the anonymous agreement included a three-year lease with a two-year extension and 25 percent royalties.
Garcia informed commissioners earning 25 percent would also mean coughing up funds to pay 25 percent of production costs.
Attending the meeting were County Judge J.D. “Butch” Wagner, Commissioner Mike Swain (Precinct 1), Commissioner Kirby Keesee (Precinct 2), Commissioner Cecil Castilleja (Precinct 3) and Commissioner John Franks (Precinct 4).
Swain said he was a little hesitant about one portion of the agreement, and that had to do with paying the proposed portion of production costs.
According to Swain, those numbers could be significant and Terry County didn’t have funds in the budget earmarked for such a project. He did, however, suggest commissioners approve a 22 percent royalty agreement with no participation in the production costs. They also agreed to the $750 an acre portion of the agreement.
Commissioners voted to approve Swain’s numbers, which Garcia would take back to the energy company.
The commissioners also approved Wagner to release the particulars of the agreement once finalized.
The income from the lease, said Terry County Clerk Kim Carter, would be dispersed to Brownfield ISD as well as Meadow ISD and Wellman-Union ISD with each district getting a certain percentage.
In the previous meeting Garcia told commissioners the energy company was serious about the lease and had already offered a check for $699,000 to secure the deal, if needed.
Another option on the table at the previous meeting for commissioners to consider from the company included a million dollar purchase of oil and gas rights, but they quickly dismissed the idea.
The $750 per acre proposal was by far a better offer than ever before received said Swain. Other offers for similar options topped out at $350 an acre.