My family owns the mineral rights to 320 acres in Billings County ND - T 138 N, R 100W. May 27,2021 we were offered $75 per acres with 1/6th royalty for 5 years. My first offer was for $25 from a different company. I live out of state and do not know if that is the going rate now. That is the only offers we got the last time we got $500 per acre with 17% royalty. Can anyone advise me of what to do ?
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I cannot comment on the specific bonus offered. 1/6th royalty is 16,6667% so very close to your old lease. In general, lease bonus offers have been lower this year. Personally, I would not do a five year lease, only a three year at the most. It ties up your acreage for too long.
I always ask what they are offering for 3/16ths, 1/5 or 1/4. Probably not going to get anything for the higher two, but the last lease filed in that township was in 2018 at 3/16ths.
You can do nothing and wait and see if offers improve. There isn’t really anything going on there now. You can take the offer at lower years. Be aware that the draft lease they offer is all in their favor, so getting an attorney to review the lease could get you better terms.
M_Barnes thank you for your response. I did contact an attorney in Dickinson and she recommended to change some things in the lease and to a three year lease with a 20% royalty, they did go along with the changes in the lease but Inter West Petroleum Corp. stood firm on 5 year lease and 1/6 royalty.
The clauses in the lease are important, so if you could get more favorable ones, then taking the 1/6th and 5 years is probably ok.
Thank you for advice I will sign the lease it’s better then no lease, but with my luck I will probably get a better offer tomorrow. Hopefully it will not be like all the other lease’s they will actually start drilling and get a productive well.
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