We received a mineral lease proposal from Dakota Energy for T163N R98W in Divide County. It is a 3 year lease with a 2 year option at 17% royalty and $200 bonus. What are the prevailing terms in this part of the county?
1 Like
Do you mind letting me know what township was that lease for? The lease terms vary considerably within the county depending on activity; 2-3 years ago some parts of the county were dormant and now multiple rigs are popping up.
I am no longer at liberty to discuss the specifics of our contracts. Prior to entering into a lease, it was helpful to look at the ND GIS map to identify trends of where the rigs appeared to be headed. At the time we finalized our lease there was no nearby activity but a person could look at the spud date of wells in surrounding townships and ranges to get an idea of future direction. Of course there’s never any guarantee of anything, but that was informative. We were (and are) represented by an oil and gas attorney which helps a lot. If your area has multiple operators that can impact offers too.
1 Like
There are so many variables. Your best bet is to ask landowners nearby if they have signed any leases yet. It’s not a bad idea to band together and hire an attorney to represent the group–hopefully you have enough acres in the unit to offer them an attractive piece of land. If they already have enough acres in the unit you don’t really hold many cards. On the other hand, If they already have 40% of the unit and your acreage can give them 51% or more they will over pay for your acreage.
Also–don’t focus too much on the bonus–think more about the royalty% and clauses.
2 Likes
Interesting, as we have mineral rights in sec 9 and 15. I have been doing a little research and it appears that the well in 9 (19530) is TA but not sure how long and if that will hold the previous lease.
section 15 has a well with “piddling” production. I am guessing any small amount would qualify as hold by production. well 19596 is listed a A. so what be happening?
1 Like
Mike, Add your township and range to your comments to keep the thread logical. There are lots of sections 9 & 15.
1 Like
If they can’t find them with the permit number they are likely too helpless for range and township to do any good.
However; to appease the gods . T163 R98 sec 9 and 15
Section 9-Last Production on the NOVA well was in 2016, so highly unlikely to be holding the previous lease. Already eight new leases in the last 25 months. Look like they are at 17%. Bonus amounts are not public.
Section 15-Torino 22-15-163-98H is still active. It is holding the section for many more months.
On the other leases in the township, there are ranges in royalties from 17%, 3/16ths and 1/5th depending upon the section. Bonus amounts are not public unless you can find out at the local watering hole. Most of us would not like the two year extension. DE Asset Holdings and Formentera are the main grantees.
1 Like