I have been offered a $900.00 land lease bonus and 3/16 royalty for minerals in section 10 Beckham County from Bluegrass Resources. That seems low to me. What is the going rate for that area? Anyone familiar with Bluegrass?
Welcome to the forum. It is more helpful if you give the complete section, township and range as there are many section 10s in Beckham. Lease offers will vary across the county, so need the exact location.
3/16ths is a minimum for many folks. Ask what they are offering for 1/5th and 1/4. I prefer a higher royalty and a lower bonus if I can get it. Also, it would be wise to invest in a good oil and gas attorney to help negotiate the lease as the draft lease is not in the mineral owner’s favor and could cause you to miss out on better royalties.
Ask Bluegrass who they are leasing for. They are probably an agent.
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Thank you for your comment. Of course you need the full legal- wasn’t thinking. Sec 10 10N 23W Beckham County. I’ll ask who Bluegrass is leasing for.
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I see leases filed from 3/16th to 1/4th in that section. Upland and Yukon Trading so far. For the whole township, there are quite a few more agents leasing, so you may get more than one offer. Ranging from 3/16ths, 1/5, 1/4.
Your insight is much appreciated. Thanks
We also just received an offer section 2310 north24 west. Our offer was $500 1/5 royalty. I countered at $1000 1/5 royalty but I have no I idea what I’m doing.
That counter may be a bit too high, but see what happens, When the poolings are finished in sections 21/28, that will give a better feel for the regional offers.
Good morning,
I received and email back declining my counter offer at $1000 for lease. They stated that they will not accept the counter and the offer stands at $500 for the lease and 1/5 of royalties. Should I pursue a $750 lease and 1/5 royalty? Also concerned about the after costs of production and such. As I’m out of state, and they know that, where do I go from here? I know you suggested an oil/gas attorney however my husbands family doesn’t want to go that route. They think it would be too expensive.
DH225
I doubt you will be able to get a higher bonus from the operator’s leasing agent. You are right to be concerned about the post production charges. The operator will try to write those into their lease. You may be able to get more favorable terms from the other agents in the section. If you do not want to invest in an attorney to help get you the correct wording on a lease, then the other option is to wait until the force pooling. Upland has filed for a horizontal well in sec 4-10N-23W with Sec 33-11N-23W. They will likely have a pooling case shortly. That will give a good idea of what the competitive bonus rates are near to you.
Is Bluegrass leasing for Upland?