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Council to authorize oil and gas lease for small city tract; Diamondback to drill in fall
Summary
City staff recommended execution of an oil and gas lease with Diamondback Energy for a 0.13‑acre city property; Diamondback was the sole proposer and offered a $10,000 per net acre bonus and $1,500 for legal fees. Company representatives said drilling on the specific tract is planned for October–December.
Keith (city staff) told council that Diamondback Energy was the only proposer in a recent bid for a 0.13‑acre city tract and recommended executing the lease. Kyle Pierce of Diamondback told council the company plans to drill this tract in the October–December window and described the proposed target zones (Lower Spraberry, Jo Mill, Wolfcamp A and B). Diamondback’s financial offer for the small tract was a $10,000 per net acre bonus (totaling $1,300 for the 0.13‑acre tract) plus $1,500 to cover legal fees; council members indicated they were ready to execute the agreement. Staff said the city has an adjacent 4.46‑acre tract previously leased and that drilling activity on city tracts will proceed as approved under lease terms. No formal vote was recorded in the workshop transcript; staff indicated the lease execution was expected to move forward under the previously approved authority to accept the successful bidder and finalize lease documents.
