So I have some mineral rights in McKenzie and Williams Counties North Dakota (or so my sister says). I have received numerous offers throughout the years to lease them...I think?, but threw them in the garbage because I thought they wanted to buy them....silly me, huh? I inherited these and my grandpa told me "don't ever sell them minerals one day North Dakota will boom again and you won't be worrying about money"...that was 10 years ago when he passed. We went through all the probate and such and I own various interests in 151N 103, 155 103, 152 102. I think I got that right from what I have read on here and looking at what the numbers should look like. So I didn't even realize the boom they were going through until I saw it on tv right after I moved to Montana and thought hey maybe this is the time? So there were quite a few of us grand kids and the letters stopped once I moved, so now what do I do? I think I need to lease them and get in a bidding battle or horse race from what I read?
If you have rights in at least 3 different spacings in those TWP and RANGE, possibly more you probably have wells already because your minerals are in a very good neighborhood that has been exploited for some time and the drilling is continuing. You should have a mineral deed on record, but it wouldn't hurt to make a fresh statement of claim, with your updated contact information. Do not sign leases until you investigate whether you have wells or not. If you have a successful well, learn to use that in your negotiations. In any case getting several parties interested in leasing your acres will at the very least shorten the negotiating time necessary to get an offer acceptable to you. The operator would make little to nothing off your acres if you lease to someone else. If there is already a successful well, that is a powerful incentive to be the winning bidder. Esser .org can probably tell you if you have wells that are over 6 months old, but remember that the information is probably 6 months out of date. I'm not a landman but if you need help scouting your minerals for existing wells or producing wells in adjacent sections, let me know. I'd be glad to help. In my experience, the more doubt you remove from your mineral rights situation, the more enjoyable it becomes.
Okay, so called sis today and asking her about it and those counties are correct. She isn't shocked as I tend to be behind the times (she is a mechanical engineer and I do social work). It sounds like I should have around 200 acres net and gross was bigger. I don't know what that is suppose to mean exactly and why the acres are different. And some of it has wells on it as she is getting checks. She is going to send me a list of wells and her check copies and such, so that should help I think? My family does not have any surface. I'm not sure what they used to have??? So now how do I find all those letters and say I'm ready for offers? Also, the first thing I read on here it seemed as though it was a lot of tax work and not worth the effort, but I think this is a bigger share. I guess I should be in touch with the family more often...she always bugged me about what I was doing with it.
With good wells and if you play it right 200 net acres could mean a few million dollars over time. I'd get some help and study and ask questions to make sure I was getting good help. I think it's probably worth the tax hassles. You could hire people to watch the people you hired to take care of the tax hassles.
If it gets around that you have 200 mineral acres in North Dakota you'll probably be getting some marriage offers too! JK
Today I decided to lease 20 acres, reading through all of the posts on here and talking to my sister I think I received a pretty good offer. It didn't have any wells on it and the company was really nice and seemed honest and sincere. Time for a new car, hahaha.
So can anyone advise me what reasonable rates are in the area? I think I have a good handle on this at somewhere around 1500-2000 an acre. Recently received a proposal for 3500 an acre for some of it.
Cara, I wouldn't lease anything that was under a producing well. You have the opportunity to make what the oil company makes per acre, not just 20%. I suspect that the $3500 per acre offers are those that already have a good producing well. They will offer you that much and laugh all the way to the bank with your money. If you want to lease your acres that are under wells, I'd say thats fine, but go for higher royalty % not one time bonus payment. Don't let them dazzle you with the bonus money, as it might be less than 2% of what they intend to make off your acres. Get some help from a professional in negotiations and get a higher royalty. If you negotiated 30% or 40% royalty, you may get an extra $3500 every couple of months and possibly that much for the first months production. Don't do anything immediately besides find some help. You don't know what you need to know to make an informed decision and the operators and landmen are aware of it. They have a narrow window to buy you off with just a fraction of what they already owe you, they have to do it before you become informed or get help negotiating from a professional. They wouldn't offer you that much if it were not worth so much more.
The landman who offered me the 3500 said to watch out for the internet because it could be landman trying to set the price, but you seem like you are looking out for my general interests. Not sure who to believe anymore...they all seem pretty clever! I had someone contact me through here almost immediately and made me a pushy offer due to end of year budget..etc, etc. But without knowing what its worth I told him I'd pass for now. It does seem that you can just sign up on here and think you are getting good numbers for lease bonuses when in fact it could be anybody making up anything? I decided to lease 20 acres so far and seemed to get pretty good rates and should use some money to get some professional help on the rest. Thanks again for the advice.
Cara, Mr Kennedy and the Landman both gave you good advice. It sounds like there is enough money involved to hire an Oil And Gas attorney who is experienced in the area where your minerals are located. You may get a good recomendation on this forum or elsewhere but you would still need to check him/her out thoroughly before making a deal with them.
I am glad you are getting help. I am just a mineral owner, as you are. I think all of the professionals here would agree that now that you have producing wells that you should focus on the royalty % , as the saying goes, the money is in the ground. I meant it when I said that $3500/acre bonus might be less than 2% of what the operator expects to make off your acres. I would rather have an extra 20% that would pay me nore every month for the next 20 to 30 years rather than a doubled or even quadrupled 1 time bonus. The operator will still be making more than you (over time) off your oil if you have a 40% royalty. For me it's not about money for money's sake, it's what you can do with it, possibly put the kids through med school, pay off your house and get debt free. Cara, don't believe everything you hear from landmen, sometimes they get a pretty good bonus if they can sign you cheap. My aunt had a bit more acreage than you have and she signed for the first offer $200 bonus and 15%, the landman got a 5% override. The landman got 1/3rd of what my aunt will receive in royalty just for mailing the offer to her, for the next 30 years or more. It is like the landman leased 100 acres of his own. My aunt didn't consult anyone. I don't want to see or hear of something like that happening to someone else.
Anyone know a good oil and gas attorney for mineral rights owners in ND?