Bakken Shale - Oil & Gas DIscussion

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Comment by Richard Needles on Tuesday

Mary, I don't know if this was covered but if it has been my apologies.  When you get offer (s) they will probably present you with a "standard" lease.  Remember everything is negotiable and probably be best to hire a O&G attorney there in Montana.  They can help wirh your mom's interest and probably well worth the money spent.  Good luck.

Comment by Daniel Dayton on Tuesday

Lease Terms and Royalty amounts are public record once the lease is recorded.  Bonus amounts are not.  Bonus values can vary from mineral owner to mineral owner, and even per mineral owner in a tract, depending on the varying situations in a tract or the amount of minerals  and owner has and were, but within a certain dollar range.

 

Negotiate with as many companies as you can.  Compare offers.  Ask for more or if that was the best offer...all smart, and ok.  Ask if they will be the operator of the well, or it's a broker, are they flipping the lease, or hired by an operator, and can they say who the operator is.

Mary you were fine, right up until you declared you were going to go full public with all your negotiations.

If you want to get the top dollar, here's what you do....don't lease.  Make sure your mother's ownership is properly on record in the county you own minerals in.  The Oil Companies when they are serious about an area, will find you. Also...don't be the first to sign..but don't be the 51% to sign either.  You'll know when it's time, as you will get several calls in a few months period. 

Comment by Mary Jones on Tuesday

Gosh, I had no idea this idea of sharing information about what companies are out there would be so controversial. I have to depend on the internet since my mom lives in Georgia and we can't just "talk to the neighbors" to find out the value of her mineral rights. She has only 59 acres...this isn't some massive deal....I'm just trying to do right by her since she isn't able to do it for herself. It would seem to me that the oil companies are in the catbird seat. They have the geological data about where the next big "find" is likely to happen...they have an army of technical specialists to advise them...mineral rights owners usually don't have access to any of that expertise. I'm unfamiliar with the term, "landman"...is that a person who is the middleman between the seller and the buyer? If so, it makes sense that they want to keep all this information secret so they can maximize their profit. I'm not looking for some huge "killer" deal...just a fair price on a relatively small parcel of mineral rights for my 83 year old mom. If I've stepped on anyone's toes, that was not my intention.

Comment by r w kennedy on Tuesday

If the oil company wants to keep their business secret, I guess they have that right. My business on the other hand can stand the light of day and I don't mind if everyone knows, and that is my right. Eastern MT is right that some operators may walk away, that doesn't change the fact that they need acres and they can't walk away from all of them or they are out of business.  The landman who doesn't get the acres he's tasked to get on a fairly consistent basis may also find himself working for a different company, possibly in a different field. Luckily for them I hear that 85% of mineral owners sign the first lease they lay eyes on, but that may change. 

Comment by Wilsontownship on Tuesday

I agree with what Eastern MT said and in particular this excerpt:

Yet as Mr. Dayton states, it may be detrimental to post a blow by blow account where every offer is publicized. I'm not suggesting you hide your results, just focus on getting your deal negotiated.

Wilson

Comment by Eastern MT on Tuesday

There is something to be said for both sides of this discussion. Mary, some operators won't get into a competitive situation. They'll buy a lease cheap, or not at all. That is fine. Your job is to get the best deal you can, their job is to get the best they can. Yet in competitive areas companies know they'll be competing offers. 

 

So it is proper to tell XTO that Hess just gave you "a higher offer". Each company knows what they're willing to pay. Sometimes they'll up their offer, other times they'll just stop bidding. Yet as Mr. Dayton states, it may be detrimental to post a blow by blow account where every offer is publicized. I'm not suggesting you hide your results, just focus on getting your deal negotiated.

 

Mr. Dayton, on the other hand the world of leasing has changed. Folks are no longer reliant on hearing what their neighbor leased for. On this site and several others mineral owners in Bozeman, Boston and Baton Rouge are comparing notes. Bonus amounts and royalty rates will continue to become more and more public. While it may make the broker's job more difficult it is a trend which will continue.  

Comment by Wilsontownship on Tuesday

Daniel Dayton is a landman (per his profile page).  So of course, he doesn't want landowners to shop for competitive bids and especially doesn't want that information shared here.  Oh well, looks like his company will not be getting your land and likely will be getting even less land as more landowners (mineral owners) become more and more savvy and do their best to learn all they can instead of just signing the first $50 dollar offer that comes along.

You keep doing what you are doing.  If a gas/oil company doesn't want to participate - that's fine.

Wilson

Comment by Joanne G on Tuesday

Mary-you are absolutely correct. This is a mineral owners forum. Education for us all. Oil companies will take advanntage of the un-informed. That is what they count on. Thanks for posting all the information.

Comment by Daniel Dayton on Tuesday

Mary...think about it from the Oil Company's point.  Would they offer their BEST...if they knew that it was going to be shopped?  Think about buying a car.  If you went to dealer Y and you got a deal...but walked out to dealer X with that deal in hand, do you think dealer Y would give you their BEST offer if they know you were not only shopping it but where going to tell all the other customers that dealership was going to have?  

Do you think only mineral owners are on here?  You just squirreled any possible deal with several companies I would assume, by posting that you are going to tell everyone what you are getting.

And....all minerals are not valued the same.  So even if you announce them you are only yourself, not helping others.  There are a lot of variables in how companies value them.  How much does the owner have? Do they control over 50% in a 1240 spacing? where EXACTLY are the minerals located?  This can vary wildly within just a mile or two. 

Comment by Mary Jones on Tuesday

It is my understanding that the purpose of this forum is for owners of mineral rights to share information with others so that we can all negotiate a FAIR deal. A fair deal is one in which both the  buyer and the seller feel good about the terms. What this forum CAN do is prevent companies from taking advantage of people who are uninformed about what a FAIR rate should be...this is no different than any other business transaction.

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