I have just been contacted by empire oil co who is representing oxy usa.
Does anyone know anything about this co? I am also wondering if anyone knows how much per acre I should expect for a lease in this area. I have lease agreements in mountrail and Burke but I have never dealt with this company
Thanks
Tammy Gallagher
Tammy, to the best of my knowledge you have never told anyone where your rights are beyond which county. I don't think anyone can even guess at a value with so little to go on.
Tammy:
As rw kennedy responded, more info as to the exact location of the minerals is needed in order to be able to place an estimated value. I have dealt with Empire on several occasions since 2004 and had no problem in regards to payments. The individual with Empire that I normally dealt with has since retired but I haven't heard any complaints about this company.
Thanks so much for the info re: Empire. The minerals are located at:
Dunn County North Dakota
142-94
Section 26: E2NW, SWNW, NWSW
5.00 net acres
Mr. Knutson offered:$750. per mineral acre
3/16 royalty
3 year lease term
Of course he said "this is the offer I have made to everyone in this area. Everybody gets the same, no-more, no-less." which is pretty much what every company says..
What are your thoughts?
Tammy, I hate to say it but the wells look marginal. Down to 110 barrels a day on a good example after only 6 months with a pump on it. I looked at the 4 wells near you including the oldest well drilled when the completion techniques weren't as advanced, where the well has only produced 10,208 barrels in the last 4.5 years. I wouldn't want to participate in one of these wells, far too long to recover the investment. I wouldn't want to be non-consent for the same reason, just more so. Considering that acres just as good or better are open to be leased and drilled elsewhere in the state. I would say they are offering you a fair price, possibly even generous. I would say take the money knowing that the bonus and the first check with multiple months are going to be the only largish checks you are going to see. I wouln't expect to see a second well drilled in any of those spacings in that area anytime soon. It's going to be one and done for a long time. There just isn't enough gas to go with the oil for faster recovery of the oil. I think the offer is reasonable.
I would second Mr. Kennedy's thoughts. My family owns minerals in 142-94-7 and 142-95-12. Fortunately, we were able to get $1000/20% from Empire, but we leased back in 1/2011. Our first well just recently came off confidential status and the numbers are far from great, however, I'm not sure it has been fracked yet. I also have some friends who own down in 141-94 with leases expiring soon and they too have been contacted by Empire with the same offer of $750, 3/16. I don't think there is much room for bargaining given the area, and I agree with RW that it is a pretty fair offer.
I think Mr. Wolberg truly was fortunate to lease before the latest round of drilling with the newest wells. When Mr.Wolberg was negotiating there was the old well, the knowledge that the new techniques would make the wells better but the new wells had not been drilled yet. The wells were alot better, but still marginal. They know exactly what to expect now and that probably makes the operator more tight fisted.
Thanks so very much! I will get this leased signed. I was not expecting to ever be contacted about these acres at all so I am very happy to get something.
One more question, I already have leases on acres in Burke, but have a tiny bit adjacent to them that is not leased.
Tract 01-1
160-92-1 lots 1 ((40.62)
0.85 acres
I have had a lease in my inbox that I received a year ago which I never signed and returned... It is a 3 year lease with 3/16 royalty. They offered $340.00 for the 0.85 acre. I never heard back from them after I didn't send the lease back. Should I contact them andgo with this lease or just sit on it? It is for just such a little bit..I am not desperate for the $340.00.
Tammy, the production near 160-92-1 appears to be better. It's also on 640 acre spacing which means more money per barrel over a 1280 spacing. 3/16 is not a bad royalty but I would try for 20% on the theory that if they say you don't have enough acreage for leverage then you don't have enough acreage for it to truly matter to them either, the operator is not going to notice a difference between 18.75% and 20% for .85 acre. I would wait them out to pay me what I call stupid money, they could just pay you top dollar for your .85 acre and save on landman costs for a long negotiation on .85 acre. It wouldn't hurt to mention it when next you talk to them. There is drilling in the area but your section isn't permitted yet. Oasis and Oxy are both in the area.