164n, 77w, section 25

Have mineral rights in ND and received lease proposal. What is going rate per acre, for royalty percentage, and lease term?

If you are in the west half, you already have a well according to the GIS map, drilled from section 26 and I would not sign a lease in that case.These Spearfish wells are pretty fast and cheap to drill, although the cost per acre could be fairly high because of how small the spacing is, At the same time, with a small spacing your royalty would not be as horribly diluted as in a 1280 well in the Bakken.

If you are in the east half, if you have significant acreage and you don't come to terms with the operator, they may/probably will not drill. I have a friend who is in a similar situation except he has almost a full standard section. He got the royalty where he wanted it but the bonus was still low and the operator wanted all the freebies, water, easements for pipelines and so forth with no attention paid to diminished property values, so my friend would probably be gifting the oil company with more than $100,000. The operator would allow a depth clause but not an effective one as the operator could get the NDIC to call the formations a common source of supply. The pooling agreement read that his minerals could be pooled with other minerals and the operator could get the minerals to the center of the earth that way also if the pooled acres were drilled to that depth, without ever having drilled my friends acres. The lease had my standard pet peeve clause that the mineral owner must notify the operator and give them 45 days to begin working to repair their breach of contract. Wild thought, why doesn't the lessee just do what the lease says? Without having to be told by the mineral owner? This clause shifts the burden to the wrong side.

Like I said, the lease is pretty ugly, yours probably is too. He did get them up to 20% and no deducts other than for taxes. The process has taken about 9 months so far. If you are in the east half of the section, have significant acreage [15-20 acres in such a small section] don't wear yourself down. Be firm and patient and make the best deal you can. I would focus on no deducts and more royalty in such a small less diluted drill spacing. My friend had a previous lease negotiated for 18% and a 1% npri that his father negotiated. Sharp man, wish I could have met him.

If you are in the west half and the well is just awaiting completion, I would consider non-consent, no bonus but you would receive the weighted average royalty that everyone else in the spacing bargained for or 16%. You would owe nothing out of pocket if the well never did pay out. If/ when the well pays out plus a 50% risk penalty you become a working interest. These wells are pretty cheap compared to a Bakken or Three Forks well 3,000 feet deep instead of 10,000, 2,000-3,000 foot lateral instead of 10,000 foot lateral. Because the pressures are lower, ordinary sand works just fine and ceramic propant is not required to hold the fractures open. These spearfish wells are drilled fast. I hope this helps.

Thank you