I have a small mineral interest in Section 10-160N-79W. Anyone know about the leasing in Section 10? I got a really low-ball offer. I thought North Dakota was really hot with oil and gas leasing. They want a 5-year lease and say they want to hold it for two years before doing any drilling.
Nell, who was the company that made the offer? did they hint as to who they may be leasing for or are they speculators/flippers? I am asking because I am trying to get information on a shell company that had operated in that county by the name of Bayside Energy. I do not have property in ND.
Wilson
Nell, ND is hot. Operators are trying to hold the spacings by production by putting a well every 2 miles, but the area is huge! I doubt there is an idle rig in the state. Last year some operators knew where their rigs were going to be barring any trouble for 2 years in advance, just keeping ahead of lease expirations. A 5 year lease would give them a cushion to know they could get you drilled. Do not forget that even drilling operators will assign leases to another operator if it suits them. Your acres value could appreciate significantly in the next 2 years, and the lessee could assign your lease to someone else for a tidy profit on the remaining 3 years. Lastly, it's a 5 year lease, whatever the landman says about drilling in the next 2 years is irrelevant, they can delay for 5 years and the longer the lease the less pressure they will feel to get your spacing drilled.
Oddly enough the contact person said the leasing agent wanted to remain anonymous! What does that say to you? Also I should be getting a packet soon in the mail and will know more then about who some of the players may be. I'll let you know as soon as I receive it.
Wilsontownship said:
Nell, who was the company that made the offer? did they hint as to who they may be leasing for or are they speculators/flippers? I am asking because I am trying to get information on a shell company that had operated in that county by the name of Bayside Energy. I do not have property in ND.
Wilson
Nell, The leasing agent (landman company) didn't even reveal their company name? Really? The guy called and said we'd like to lease your minerals and we'd prefer to not tell you who we are - just call us landman company X. Don't bother with them, but use this experience to learn. When you get the name of this landman company X share it here.
Nell:
I will advise you to be wary of this type of introduction from any leasing agent. RW is correct about the length of the lease as 3 years would be max with no extension. Again, under these circumstances, I would be very careful as this type company could be a major headache down the road. You do some homework and study up on your immediate area and become aware of the going bonus rates for that area. I would also insist on a 20% royalty with a pugh clause in the lease. These are your minerals and you must protect your assets. Good luck.
Nell B Mitchel said:
Oddly enough the contact person said the leasing agent wanted to remain anonymous! What does that say to you? Also I should be getting a packet soon in the mail and will know more then about who some of the players may be. I'll let you know as soon as I receive it.
Wilsontownship said:Nell, who was the company that made the offer? did they hint as to who they may be leasing for or are they speculators/flippers? I am asking because I am trying to get information on a shell company that had operated in that county by the name of Bayside Energy. I do not have property in ND.
Wilson