My great-grandfather apparently retained mineral rights on two quarter-sections of land in Billings County, North Dakota: T137N/R100W SW1/4 of Section 11 and NW1/4 of Section 14. A few weeks ago, Diamond Resources offered $25 per acre for a 5-year lease with a 1/6 royalty. I thought that was pretty low, and I know somebody in a similar area (about 15 miles north) who recently received $200 per acre for a 3-year lease with a 3/16 royalty. He and his attorney suspect that Continental Resources is behind the offer.
So, I contacted the Diamond Resources Landman and counter-offered the latter terms above (as well as a guarantee that there would be no “royalty subtractions” for transport and refining of natural gas. The Landman said he would confer with his “client,” but then a few days later, he said my offer was refused, because his client could not meet those terms based on the rights being at the southern edge of the current prospect.
I believe my great-grandfather and his wife had 10 living children when they both died, but only one of those children is still alive, so there are likely dozens of co-owners (I have a detailed genealogy of all of the descendants). I am representing the 5 children of one of the 10 children of the original owner.
I really don’t know a lot about all of this, and I have two initial questions:
Does anybody have any feedback/information on what is currently happening in that area, and what lease terms would be reasonable?
If several of the dozens of co-owners sign the leases with the original terms sent by Diamond Resources, but other co-owners refuse to sign, what happens if oil/gas is discovered? Do the co-owners who refused to sign the original lease get contacted again, and can they negotiate the royalty? I am trying to figure out whether it is best to just wait at this point.