Oil & gas discussion group for those interested in Converse County, WY. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.
My family owns 2553.86 mineral acres in North Eastern, Converse County Wyoming; Chesapeake Oil has about half of it leased, the other half was leased by Red River oil, this lease expired on March 1st 2011; I contacted Chesapeake about leasing the other half and they told me they were not concentrating on that area right now; but, would consider our terms if we sent them in; however I am new to mineral leasing and have no idea what terms to offer. I also contacted Mack Energy but they also said they were not actively seeking leases in our area, but, would keep my information in case they do later. So how do I give Chesapeake terms if I can't find any current offers in my area? I thought they would put something on the table, especially as much activity is going on in Converse County, and we could go from there. Also does anyone know of any other company's that are leasing in North Eastern Converse County?
Thanks; Fred
Fred what I've seen is Chesapeake actively leasing around Douglas, and also south / sw of Bill. As to sending them your terms; What they're saying is; If you asked for $25/$50 per acre they may lease you now (even though you're outside their area of focus). If you ask for $500 they'll just ignore it.
So I suspect patience is probably your best bet. There are two dozen drilling permits across 36N- 70W & 71W alone, and more across the general area. If they start drilling and hitting wells there, it is possible they may expand their area of interest towards you.
You're doing the right thing by "showing" your minerals. The timing is not quite right. None the less, send them a letter and ask for ($200?) with 3/16th. Expect they may counter with $50 and 15%. Then decide if you really want to strike a deal now. If you're anxious for funds I suspect they will lease them for cheap. Yet, if you wait and some of this acreage starts to produce you just might see lease rates of $200 to $500 across a larger area of Converse County.
Does anyone have an educated guess as to when drilling starts from the time of permit approval? And is anyone aware of any drilling commencing in the South Hylton Ranch Deep Unit? Thanks for the info!
George, I don't know anything on the Unit you mention. Though I can provide you basic info on drilling permits. They're valid for one year. Typically several months pass before drilling begins, though it could be the following week. Sometimes drilling never begins after a permit is approved. So it's near impossible to make an educated guess, you just have to watch and wait.
The state of Wyoming is thinking of going to 3/16 ths royalty rate which will establish a new base line for all of us. Try to expressley forbid processing fees from being deducted from any production.
Where have all of the Oil Bugs gone???
Have any of you ever heard of a company called Scarlett Resourses, from New Jersey?? My Sister and I have been approached by this company and no one seems to know anything about them. We would appreciate any information you might have Thany You very Much
Mr. Alexander, I've not heard of "Scarlett Res.". Though it is not unusual for many unknown (or new start up) companies to lease acres in an area which is active. These "companies" may be only a single individual or an LLC which is speculating. They want to buy some leases, mark them up and/or carve out some royalty, then sell (assign) those leases to others for a profit.
There is nothing wrong with the practice. They are risking their investment (by buying your lease) in the hopes of a profit. You just need to make sure you receive your bonus payment up front before delivering a signed lease to them. Good Luck.
Thank you Sir, I appreciate your help. How about a Company called Anderson Resourses from Salt Lake? I have received a lease proposal from them also. Thank you very much Alex/
I don't know any of these companies.
In 2007 / early 2008, we received a couple of offers from small companies that were willing to pay a small amount of money on a lease -- about $50.00 per acre. I turned those offers down. The companies were not much more than a phone number and a web page as near as I could tell. About 18 months later, I got offers from firms representing Chesapeake which were much higher. We eventually negotiated a lease which was acceptable to Chesapeake and also to us.
My point is, I think there are some small companies who try to anticipate what will eventually be an active area for leasing by a larger oil company. These small companies try to acquire as many leases as they can at as low a price as possible. They then hold on to these leases until a larger oil company offers more money.
If you want the money as soon as possible, these small companies might be a good alternative. If you are trying to get fair market price, you need to wait until a larger oil company has interest in the area where your minerals are located.
There is no "correct way" to do this. Everyone has different circumstances. But my observations are that we are seeing two different types of companies looking to lease minerals. The earliest offers come from small companies that are speculating. The later offers come from oil companies that are trying to tie up large plots of land with the intention of drilling in the area. Will they drill is always the question? But as mineral owners we do have a choice of who we lease to so it pays to pay attention to the intentions of the companies that are trying to lease from us or buy our minerals.
Now that we have leased, I have offers from companies trying to buy our minerals. I think this is speculation because there are no wells drilled close to us yet. So in my opinion, speculation is the first wave.
Good Luck!
John
Has Hoover and Stacey indicated to you which company they are working for? They have been paying a single lump sum lease bonus upfront. Suggest you not warrant your mineral right deed and get a company check - not a bank draft.
Lease bonus rates are going up in Converse county and the companies are trying to hide the amounts. We just got a royalty rate of 3/16's on our property.
Hello, my husband's grandmother homesteaded N of Douglas about 30 mi. We presently have some land leased to Chesapeake. Unfortunately we no longer own the land just the mineral rights. Would be interested in learning any new drilling activity in the area. Thanks
Joyce: You will need to be much more specific about the location of your minerals. What is the Township, Range and Section? Have your minerals been added to a BLM Exploratory Drilling Unit? There is activity in many places but not in other places. Location may helps us anser your question. If you haven't looked at the Wyoming Oil & Gas Commission web site, I suggest you give it a look. There is a lot of information of interest on that site. Good Luck! John
twnshp 35N R72W section 10 Haven't had much luck on that website but I will try again also don't know about the drilling unit.
Joyce:
I took a quick look on the Wyoming web site. I don't see any permits pulled during the last year for 35/72 and all the wells in Section 10 and the eight surrounding sections appear to be 60s 70s and 80s wells -- most of them abandoned. So currectly, I don't see much activity. But you never know. I would talk to some land owners in the area and see if any of the oil companies have been doing seismic studies. If so, they are looking for oil and might drill in the future. The studies are generally a predictor of future drilling activity. Good Luck! John
Thanks John! I heard they were doing seismic to the south a couple sections, so I am keeping my fingers crossed! Joyce
Hello Wall, I have mineral rights in Converse county. I don't understand the numbers provided, so will post them here and perhaps someone can make sense out of them.
Town: 32
North Range 71
Section # 7/8
Also: town: 32
North 72
West 6
Section 2, sw 4/s and sw 4/e.
Any help would be appreciated.