We have drilling on adjacent properties. Now they want to tie up our lease for 5 years at $500 per mineral acre. What is the going rate in this area.
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I observed your location and that you say there is current drilling but so far your minerals are still unleased. May I ask who is offering $500.00 ? It is hard to compare offers since we signed 9-10 months ago. We were told drilling would begin this summer. A landman has been signing several of my family in that area but (our leases were signed before drilling). Iād love to know if these wells look productive or not. We are in section 34 - so that may confirm for us that weāre talking about the same wells or locations. There are several discussions on this Mineral Rights Forum about what happens if you are not signed - several are from 8years ago when I was in that position with my minerals and pooling was going to be assigned - the people who answered my questions helped a lot.
You may be a descendant of the same homesteader family as I am - any thoughts or interest on that subject?
We are descendants of the Peckenpaugh family with lots: Township 47 North, Range 80 West 6th P.M>
Section 33: SESW, SWSE
Township 46 North, Range 80 West, 6th P>M>
Section 4: All
Section 9:All
Currently We are under lease through Contex Energy for Black Hills
We received a packet of papers listing 27 applications to drill Horizontal Wells. ATX ENERGY Partners, LLC from TX is the applicant. Someone just called my brother-in-law and offered $500 although there is already a 3 year extension on the lease. Maybe Contex is not continuing.
A man called us by the name of DOAK Worley for ATX
Does any of this mean anything to you? We are clearly clueless. Who would be a knowledgeable person in the area to ask?There must be specialist who represent property owners.
~Many things will catch your eye, but only a few will catch your heartā¦pursue those~
Gerrine, we are related, my grandmother was Nina Peckenpaugh.
ATX is about the only active players in the area as far as drilling goes. There was a horizontal Niobrara, Mowry, and Frontier well that was drilled in 46N 80W back in 2014-15. The production was fairly poor for all three wells but ATX may be wanting to test out some new formations or completion techniques in the area. You can see in the map below that they have drilled a couple of new wells (yellow) but no production data exists yet for them. It will be interesting to see how they do.
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were they offering $500 to lease, or trying to buy?
extended the lease because we were not paying attention. And now they want to drill.
I would like to see some family cohesion on this topic. The value of the oil has gone up and they are still offering low prices. Iāll be ready for the next round. Actuallyā¦I got some (and you probably did as well) papers they just filed with the intention to drill.
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If it was a built in extension then there wouldnāt have been much that you could have done. For example, many Rocky mountain leases are 3 + 2, three years primary with an option to extend for 2 additional years are a preset rate per acre.
Oil prices are up since 2016, but they are volatile and under pressure.
Our family has been contacted by ATX Energy also, We are in Township 45N, R80W Section 5 & 6 We have been offered $400 per acre at 15% royalty for 5yr + 3yr option. We too are unsure. Iāve read never accept 1st offer, it will be the lowest. HELP pleaseā¦
NEgal looks like the folks around are averaging 20% royalty any more so start with that and a 3/2 yr lease That means after 3 years if they donāt drill they can extend the lease for 2 more years but have to pay the same bonus money to extend. The shorter the length of lease the more likely they are to drill. 18.75% is basically the standard. The landsmen are coming in with āOK 20% royalty then 5/2 or 5/3 yr lease.ā Tell them you will take the offer if they put in a Plugh clause and the Most Favored Nation clause. MFN clause says you agree to the terms but if they lease anyone to better terms than yours you get the same terms as theirs. They REALLY hate that clause! Always start with what would be a āperfect leaseā then negotiate. 20% $400/acre 3/2yr 18.75% $600/acre 3/2yr 18% $1000/acre 5/2yr Always make them pay more for time i.e.:time=money Good luck! P.S. they will always say āThat is the most we can offerā
Question about the MFN clause. Does this pertain strictly to the undivided co-owners of a particular plot?
For instance my uncle, sister, and I together own a 320 acre parcel. Iām negotiating for all of us. Would I need the MFN in this case?
My understanding of it (not too much) is if they try to unitize with other mineral owners it can apply to that also. They are teaching the new classes of land people to absolutely āneverā accept that.