I want to start by saying how awesome it is to see so many knowledgeable people here helping out total strangers! My reason for the post is to get some info on a lease offer that I received regarding newly inherited minerals. I’ve been trying to find my own answers, but it’s just raised even more questions. It’s for the minerals at 36 142N 98W. Or that’s where the well is going to be placed? I’m very confused. It looks to me like there’s already a well in that area? Is the person a flipper or working with the actual company? It seems pretty unprofessional to not address the leasee directly and instead use a generic looking offer? Shouldn’t there be additional clauses? Please, can someone give any advice?
Yes, its a shady letter. For one thing, I never take a royalty less than 25 % period. 25% has been the standard since the beginning of time. You are talking to a middle man, who wants to take part of YOUR minerals. “one for you two for me”. Just hold on if there is an APD filed, then you will get the serious lessees. Youdo have the right to particiapte as a WI, but why didnt they tell you your cost, yo may have to figure the numbers out on your own. The minerals do have to be leased before an Operator can drill. I have several leases in ND. Seems things are booming everywhere.
Your letter is a standard offer letter for the area. If you are interested in talking further, then request the official lease draft. It will need some negotiation. Personally, it is only for those with deep knowledge and deep pockets to participate in a well.
The section has two old dry holes so you are open to lease. The leases that have been filed so far have been filed by Inter West Petroleum for 1/6th. This particular area is just outside the main core, so the royalties offered are likely to be lower. 25% would be very unusual. This is not the Permian Basin. The wells nearby have much lower recoveries.
I do not see a permit filed yet for 36, but there are permits for two horizontal wells three miles to the west, so that is encouraging. That operator is Morgan E&P LLC. Most of the leases in that area were filed at 1/6th, but a few at 3/16ths. Pro Energy is listed as the Grantee, so the same company as your letter.
So these are the actual mineral locations we own in that area. Why would they be contacting us for an area that’s not part of what we own?
Your acreage in SW4 of 36-142N-98W is within their interest area of the planned well.