Exploration companies/contracts

We have been approached by Augustus May located in Texas to lease out our mineral rights in Sheridan/Roosevelt counties Montana. We are complete novices at this and want to know if anyone has had any dealings with this company and what they thought. The company is offering us $325 for 5 yrs with a 5 yr option/$300 for 4 yrs with a 3 yr opt/$275 for 3 yrs with a 2 yr option - all options would pay $600 and 1/6th royalties. Is anyone familiar with this area and knowledgeable concerning the average contract price that could give us some advice? Thanks, Michael


I am familiar with the Roosevelt/Sheridan county areas and these offerings are BAD. First, where are your minerals located in these counties (Township/Range/Section). How far from your mineral area is the nearest production and what production figures are involved? These areas are slowly being developed and there are many permits and new drills currently occurring. In regards to leasing, I would start out in the $800 - $1000/acre range; no more than a 3 year lease; 20% but not less than 18% royalty; no options on the table. Don't be in a hurry to lease as time is on your side and use it to the fullest to get your best deal. This Augustus is just some type of investment company trying to get something for nothing. Read up on some of the numerous posts on this forum dealing with leasing. Also, if you go to "Groups" above; click on and go to Montana then to Roosevelt and Sheridan Counties. Here, you can read posts from others who have minerals in these counties. Good luck.

Is you property on the Reservation or off? That plays a lot into the potential companies that may be interested and therefore the potential value of the leases. Off reservation there are a lot more companies currently working than on it. Just curious.