We own land and mineral rights in Roosevelt County for about 950 acres in Township 30 North, Range 56 East. We were offered a renewal lease a few months ago from Whiting for $250 for a 3 years contract and16% royalty. We did not accept this renewal as our lease would expire the end of August and we wanted to be open for other offers? Is there any recent leases in this area and if so, what are the current offers?
Fay:
During the State Auction (9/4/13); Northern Oil & Gas, Inc. paid $1,110.00/acre in T27N;R57E;Section 10. Of course, this area is just to the South of your area and more drilling activity has occurred around this area. I think that the $250/acre is on the low side, and the 16% royalty is also low. Since you possess about 950 acres, you should be in good shape for negotiations. I would begin to market your minerals by listing them under "New Mkt Place" at the top of this page. I would negotiate for a 20% royalty in any case with no more than a 3 year lease term.
Thank you Charles for your reply. The information sent was very helpful. Before listing under New Market Place, I would like to know who sponsors the site and who has access to the postings?
Fay:
This site is operated via the Mineral Rights Forum. You can email Kenny D., the administrator of the website or Mr. R T Dukes who also is involved in running this website. Either one will be able to answer your questions. Good luck and hope you get at great lease and most of all, a great well(s).
Fay,
With Whiting's interest and that many acres, you are in a position to work out a comprehensive farmout agreement or lease earn in agreement that will yield the most for acreage in each section. The payments will be based on timing, geologic potential, and Whiting's performance. If you are south of the fault zone, some of your acreage could be worth as much as $4500/acre while other acreage will be worth less now but more later. I'd resist putting all your eggs in one basket lease.
Thank you Gary. I'll need to look into a comprehensive farmout agreement and/or lease earn in agreement. I'm not sure where the fault line lies, so I have several issues to investigate. If you have any recommended resources for either agreement, please let me know. Our property is primarily on the southern outskirt of Froid, Montana. This is probably North of the fault line, but I need to check this out as well. I'm most appreciative of your suggestions.
Fay,
I looked up your area. Whiting has a permit on Section 30 but I don't know if they spudded before your lease expired. Whiting has a nice 3 forks exploration going on in your area. It has also extended some leases to 2016 in the area. Section 29 doesn't seem to be permitted as yet but an application could have been made. You have some nice options. Answer my "friend request" and I'll be glad to explain them.
Gary Hutchinson
fay c weber said:
Thank you Gary. I'll need to look into a comprehensive farmout agreement and/or lease earn in agreement. I'm not sure where the fault line lies, so I have several issues to investigate. If you have any recommended resources for either agreement, please let me know. Our property is primarily on the southern outskirt of Froid, Montana. This is probably North of the fault line, but I need to check this out as well. I'm most appreciative of your suggestions.