Current Signing Bonus and Royalty Rates of Oil and Gas Leases

North Dakota Mineral Rights McKenzie County, ND
1

Greetings All.

We have 14.5 net mineral acres in (Township 147N, Range 99W, 5th PM, Section 34:N2, 320 gross acres) and the current lease is expiring next month. The current lease is owned by Woodbine Production Corporation. We have had a proposal from a landman with Sullivan Land Resources, LLC on behalf of Medora Resources, LLC. They want to top lease our current oil and gas lease for $750 per net acre and 3/16th royalty for 3 years.

My questions are: 1)What is top leasing, as opposed to just leasing? 2)Is the signing bonus in line with what others are getting? I know of one other owner with the same mineral rights getting $1250/net acre and 1/5th royalty 2 years ago. 3)Any information on Sullivan Land Resources or Medora Resources that would be helpful to me in my decision? 4)Any production recently being done in this area?

Thanks, Bob

2

If you look up the North Dakota Industrial Commission Oil and Gas Division and go to the Statistics page you can see what kind of productivity is going on in that particular pool. I'm a novice. But that's where I go to do research in my pool.

3

Bob, there are two faily new wells just south of you with IP's of 515 and 1,026 barrels, they look ok but not spectacular.

As for top leasing, it's been discussed before at length and ai suggest a search. I commented on it myself a few times and nothing has changed in my opinion. Your strongest bargaining position is after your current lease expires, you should be able to negotiate more than your top lease offer. Worth waiting for I would say.