Lease Rates in Moffat County Colorado?

General Mineral Rights Discussion
81

Jamie,

Is it possible for you to get a lease when you have one recorded by SWEPI? It looks like they have leased you up without you receiving payment. Have you contacted Moffat County and reported what happened? Can they take it off their books or will you have to hire an attorney and go after SWEPI?

Jamie Velsor said:

Here’s the latest turn of events regarding my interests in Moffat County. Having received an offer in the form of a Paid-Up Lease from a company called Swepi including a bank draft of up to $40,000.00; after waiting their requested two month time period with which to conduct a title search, I started calling the land services working on their behalf. I was at first assured that the money would be forthcoming, etc. I then asked to speak directly to the contact who reached out to me and I was told that he is a very busy person to which I said that I was also a very busy person but for the sake of good customer service, I would like for him to call me or contact me via email directly. After a few days, I was contacted by him via telephone with excuses as to why he couldn’t reach me and said that he would check into the concerns that I had and get back to me. After a few days, I received a call from someone claiming to be a title searcher who then told me that my mineral interests were located in a unit and that I should contact the BLM for further information on my interests. Oh and yes, he was oh so sorry that the Swepi offer could not go forward as offered. So for those of you to obtain a bank draft as opposed to a cashier’s check or other form of cash in hand, I would be cautious. My bank would not act on the draft until they received verification that the funds would be available for deposit in “cash” format. What was interesting was that my bank insisted on holding onto the original documents until such time as it was confirmed to be a legitimate deal and so we provided Swepi with a duplicate original with a photo-copied signature and notarization. I was surprised to hear that the Moffat County Clerk’s Office actually accepted that document as recordable and did so on behalf of Swepi. This issue alone has me very concerned as far as ethical practices in a county recorder’s office. Upon calling the BLM, they provided me with information of a company who is currently working that area along with other helpful information.

I made a call to a company known as Foundation Energy and after reviewing the situation and a few emails, I have learned that this company had contacted me back in December of 2010 with an offer. Due to the fact that I was involved with the Swepi proposed deal, I did not continue with Foundation. So, as of today, I am requesting a duplicate offer for my consideration and review and they are offering $135 per acre with a 15% royalty and a five-year lease. I am interested to see what clauses will be contained and wonder if I have any room to move with their offer. Any information, etc., would be greatly appreciated. So, what I can recommend is that you have signed with Swepi based on the bank draft they submitted, I hope it works out for you. If you haven’t signed and yet are still considering, I would request something definitely more substantial than a bank draft. I have been told that Shell did a “mass” mailing to scope the region to explore this area.

82

Could you pass on an email address or phone numbers for your contact at Foundation Energy? I am still looking for a possible lease for my Moffat County property. Thanks.

df

Jamie Velsor said:

Here’s the latest turn of events regarding my interests in Moffat County. Having received an offer in the form of a Paid-Up Lease from a company called Swepi including a bank draft of up to $40,000.00; after waiting their requested two month time period with which to conduct a title search, I started calling the land services working on their behalf. I was at first assured that the money would be forthcoming, etc. I then asked to speak directly to the contact who reached out to me and I was told that he is a very busy person to which I said that I was also a very busy person but for the sake of good customer service, I would like for him to call me or contact me via email directly. After a few days, I was contacted by him via telephone with excuses as to why he couldn’t reach me and said that he would check into the concerns that I had and get back to me. After a few days, I received a call from someone claiming to be a title searcher who then told me that my mineral interests were located in a unit and that I should contact the BLM for further information on my interests. Oh and yes, he was oh so sorry that the Swepi offer could not go forward as offered. So for those of you to obtain a bank draft as opposed to a cashier’s check or other form of cash in hand, I would be cautious. My bank would not act on the draft until they received verification that the funds would be available for deposit in “cash” format. What was interesting was that my bank insisted on holding onto the original documents until such time as it was confirmed to be a legitimate deal and so we provided Swepi with a duplicate original with a photo-copied signature and notarization. I was surprised to hear that the Moffat County Clerk’s Office actually accepted that document as recordable and did so on behalf of Swepi. This issue alone has me very concerned as far as ethical practices in a county recorder’s office. Upon calling the BLM, they provided me with information of a company who is currently working that area along with other helpful information.

I made a call to a company known as Foundation Energy and after reviewing the situation and a few emails, I have learned that this company had contacted me back in December of 2010 with an offer. Due to the fact that I was involved with the Swepi proposed deal, I did not continue with Foundation. So, as of today, I am requesting a duplicate offer for my consideration and review and they are offering $135. per acre with a 15% royalty and a five-year lease. I am interested to see what clauses will be contained and wonder if I have any room to move with their offer. Any information, etc., would be greatly appreciated. So, what I can recommend is that you have signed with Swepi based on the bank draft they submitted, I hope it works out for you. If you haven’t signed and yet are still considering, I would request something definitely more substantial than a bank draft. I have been told that Shell did a “mass” mailing to scope the region to explore this area.

83

Hi Dennis - I have asked about this on your behalf and my contact says she would like a name and what mineral interests you have so she can research your area prior to talking with you. If you are agreeable to this request, you can email me at (“EDITED” please use the private messaging system for contact info. This protects you and the site) and I will provide you with the requested information. Hope this has been helpful.

DennisF said:

Could you pass on an email address or phone numbers for your contact at Foundation Energy? I am still looking for a possible lease for my Moffat County property. Thanks. df

Jamie Velsor said:

Here’s the latest turn of events regarding my interests in Moffat County. Having received an offer in the form of a Paid-Up Lease from a company called Swepi including a bank draft of up to $40,000.00; after waiting their requested two month time period with which to conduct a title search, I started calling the land services working on their behalf. I was at first assured that the money would be forthcoming, etc. I then asked to speak directly to the contact who reached out to me and I was told that he is a very busy person to which I said that I was also a very busy person but for the sake of good customer service, I would like for him to call me or contact me via email directly. After a few days, I was contacted by him via telephone with excuses as to why he couldn’t reach me and said that he would check into the concerns that I had and get back to me. After a few days, I received a call from someone claiming to be a title searcher who then told me that my mineral interests were located in a unit and that I should contact the BLM for further information on my interests. Oh and yes, he was oh so sorry that the Swepi offer could not go forward as offered. So for those of you to obtain a bank draft as opposed to a cashier’s check or other form of cash in hand, I would be cautious. My bank would not act on the draft until they received verification that the funds would be available for deposit in “cash” format. What was interesting was that my bank insisted on holding onto the original documents until such time as it was confirmed to be a legitimate deal and so we provided Swepi with a duplicate original with a photo-copied signature and notarization. I was surprised to hear that the Moffat County Clerk’s Office actually accepted that document as recordable and did so on behalf of Swepi. This issue alone has me very concerned as far as ethical practices in a county recorder’s office. Upon calling the BLM, they provided me with information of a company who is currently working that area along with other helpful information.

I made a call to a company known as Foundation Energy and after reviewing the situation and a few emails, I have learned that this company had contacted me back in December of 2010 with an offer. Due to the fact that I was involved with the Swepi proposed deal, I did not continue with Foundation. So, as of today, I am requesting a duplicate offer for my consideration and review and they are offering $135. per acre with a 15% royalty and a five-year lease. I am interested to see what clauses will be contained and wonder if I have any room to move with their offer. Any information, etc., would be greatly appreciated. So, what I can recommend is that you have signed with Swepi based on the bank draft they submitted, I hope it works out for you. If you haven’t signed and yet are still considering, I would request something definitely more substantial than a bank draft. I have been told that Shell did a “mass” mailing to scope the region to explore this area.

84

Hi Dianne - I am in the process of attempting to have Swepi send me a “release” of the paid-up lease they did submit for recording. I’ll give it a week and hope to have received the appropriate documents to get the lease nulled from the county clerk’s records. Hope this has been helpful!

Dianne said:

Jamie,

Is it possible for you to get a lease when you have one recorded by SWEPI? It looks like they have leased you up without you receiving payment. Have you contacted Moffat County and reported what happened? Can they take it off their books or will you have to hire an attorney and go after SWEPI?

Jamie Velsor said:

Here’s the latest turn of events regarding my interests in Moffat County. Having received an offer in the form of a Paid-Up Lease from a company called Swepi including a bank draft of up to $40,000.00; after waiting their requested two month time period with which to conduct a title search, I started calling the land services working on their behalf. I was at first assured that the money would be forthcoming, etc. I then asked to speak directly to the contact who reached out to me and I was told that he is a very busy person to which I said that I was also a very busy person but for the sake of good customer service, I would like for him to call me or contact me via email directly. After a few days, I was contacted by him via telephone with excuses as to why he couldn’t reach me and said that he would check into the concerns that I had and get back to me. After a few days, I received a call from someone claiming to be a title searcher who then told me that my mineral interests were located in a unit and that I should contact the BLM for further information on my interests. Oh and yes, he was oh so sorry that the Swepi offer could not go forward as offered. So for those of you to obtain a bank draft as opposed to a cashier’s check or other form of cash in hand, I would be cautious. My bank would not act on the draft until they received verification that the funds would be available for deposit in “cash” format. What was interesting was that my bank insisted on holding onto the original documents until such time as it was confirmed to be a legitimate deal and so we provided Swepi with a duplicate original with a photo-copied signature and notarization. I was surprised to hear that the Moffat County Clerk’s Office actually accepted that document as recordable and did so on behalf of Swepi. This issue alone has me very concerned as far as ethical practices in a county recorder’s office. Upon calling the BLM, they provided me with information of a company who is currently working that area along with other helpful information.

85

Hi and thanks for writing - I am attempting to secure a “Release” that will nullify the recorded document. I am somewhat confused. Are you at a standoff with Foundation? Yes, I have checked out the website along with the BLM’s site and seem to learn more and more each day about my mineral interest situation. I have been informed that my interests are included in a Federal unit, that there is work being done and hope to learn more when I obtain the paperwork from Foundation. Please keep me posted as to your progress and best of luck to you!

mahoney said:

Jamie - I’m not certain that I understand…is your mineral interest in a Federal Unit (BLM)? Evidently not, if BLM is sending you to Foundation Energy. Foundation bought from Pioneer in Moffat County relatively recently. Foundation is currently permitted to reenter…and I own 25% - they have no lease with me (Pioneer did not either). Foundation offered a “producer 88” lease and the same terms they offered you. I sent them my lease form…and I guess we are at a stand-off right for now.

As for SWEPI (Shell)…about every week someone from MJ Land Services (agent) contacts me, and more recently, independent land men. They want to lease interests in Routt and Moffat. Thus far, Shell is inflexible about altering their lease form - but their bonus keeps going up - now at $350. I would not accept a draft. In your lease you “warrant” ownership - if it turns out otherwise, it is up to them to get their bonus $ back.

What happens with your recorded lease in the County now??

Do you look at the Colorado Oil and Gas Commission website? Loads of information about permits, applications, production, maps, hearings, etc. Their material is not updated each day, but good.

86

Hi Gerald - It is wonderful that your dealings with Shell have been positive. In my case, it seemed a bit sketchy due to the terms of the approval of payment for leasing my interests and as it turns out, they wanted to protect their interests, have time to determine genuine ownership and then learned that my interests are contained in another project. Again, I have no qualms with Shell, but my experience had a questionable feel to their intent and combined with the lack of prompt response, is what added to my concerns about their offer. Best of luck and thanks for all your information!

Gerald Hicks said:

As an update… I mentioned on an earlier post that I had signed a lease extension with Shell for our mineral interests in Moffat County. We have an existing lease that was originally with East Resources, whom Shell purchased in mid-year 2010. The lease extension was a straight five year extension, $250/acre bonus with a royalty of 17.5%. I returned the bank draft with the lease and requested in writing a check for the 10% of the bonus upon completion of the title work. All of my correspondence was directly with Shell, to the best of my knowledge. Everything came to me on Shell letterhead. Anyhow, six weeks after mailing the signed lease I received a check for the full 10% owed to me, the balance is due on or before the existing lease expires the end of July of this year. I had no issues when working directly with Shell, no excuses, exceptions, nothing. They returned calls and E-Mails promptly, and answered my questions.

I won’t say that I got the best deal available, but…dealing directly with Shell (at least in our case) was straight forward.

Jerry Hicks

87

Foundation offers a poor lease; to their benefit, of course, but you will find it is not to yours. So things are stalled out for the time being.

My interest is in the same area as yours. Mine is in Section 24 - I see that yours is in Section 22. Foundation bought the “sombrero unit” from Pioneer awhile back. Neither Pioneer nor Foundation have a lease for my 25% and Foundation was recently permitted to reenter a well in the N1/4 of Section 24. Eventually, if their wells are successful, they will need to lease my interests…so if/when they come back, I can leverage my lease terms.

Unless you (or whoever you inherited or bought your interest from) leased that mineral interest, you are not leased and are not “part” of a federal or any other unit. Suggest you use this to your advantage by insisting on lease terms that are favorable to you. Obviously, you don’t want to be part of a large federal unit..it would very much diminish your royalty! Look at pugh clauses (pronounced pew) and define reasonable unit size - maybe not greater than 320 acres.

Hi and thanks for writing - I am attempting to secure a “Release” that will nullify the recorded document. I am somewhat confused. Are you at a standoff with Foundation? Yes, I have checked out the web site along with the BLM’s site and seem to learn more and more each day about my mineral interest situation. I have been informed that my interests are included in a Federal unit, that there is work being done and hope to learn more when I obtain the paperwork from Foundation. Please keep me posted as to your progress and best of luck to you!

Jamie - I’m not certain that I understand…is your mineral interest in a Federal Unit (BLM)? Evidently not, if BLM is sending you to Foundation Energy. Foundation bought from Pioneer in Moffat County relatively recently. Foundation is currently permitted to reenter…and I own 25% - they have no lease with me (Pioneer did not either). Foundation offered a “producer 88” lease and the same terms they offered you. I sent them my lease form…and I guess we are at a stand-off right for now.

As for SWEPI (Shell)…about every week someone from MJ Land Services (agent) contacts me, and more recently, independent land men. They want to lease interests in Routt and Moffat. Thus far, Shell is inflexible about altering their lease form - but their bonus keeps going up - now at $350. I would not accept a draft. In your lease you “warrant” ownership - if it turns out otherwise, it is up to them to get their bonus $ back.

What happens with your recorded lease in the County now??

Do you look at the Colorado Oil and Gas Commission web site? Loads of information about permits, applications, production, maps, hearings, etc. Their material is not updated each day, but good.

88

Hello everyone, I would like to thank you all for your discussion topic and your responses - they are timely and have been quite informative. I’ve entered the game a little later than most it seems.

I have about 400 acres in Section 20-4-86 near Oak Creek Colorado and recently, I’ve been contacted by Shell offering a paid up oil and gas lease. The terms are $250/acre 3+2 years and 17.5% royalty after expenses as I’m sure is the standard lease they start with. I’m not real happy with the text of this lease especially after having read much of the information I’ve been able to find on the Internet concerning these types of leases. However, not being well versed in legalese, I find the whole thing a bit confusing.

Has anyone successfully negotiated a lease that is more favorable to the lessor than the initial lease offered by Shell? If you have, what changes did you insist on? Did you use a lawyer local to the area in the negotiations? Were you happy with the resulting negotiations and results? Any information concerning your final lease or the changes you made, the lawyer you used, and your negotiating methods would be greatly appreciated.

Best regards,

George Hageman

89

Hello all,

I have 120 NMAs in 35 7N 91W of Moffat County that I would like to place. If anyone has interest or knows of a company that might; my email is (EDITED - Please use the private messaging system for contact information).

Thanks,

Zane

90

This is something I received in my email a couple of days ago. I don’t know if it’s true or not. I am still waiting for the proof in the pudding. Dianne

PRIME NIOBRARA SHALE OIL POSITION AVAILABILITY – PREVIEW ANNOUNCEMENT

  • 65,000 gross and 26,000 net acres in heart of USGS “Continuous Niobrara Oil Assessment Unit”
  • Sand Wash Basin in the Greater Green River Basin, Routt and Moffat Counties, Colorado
  • Surrounding Buck Peak Field (T6N-R90W) – one of the two most prolific, fractured, Niobrara vertical production data points in the Rockies (the other one being Silo Field in the DJ Basin)
  • Buck Peak vertical Niobrara cumulative production per well up to 1.6 million barrels oil
  • Estimated oil in place per square mile – 75 MMBOE to 150 MMBOE – recoverability possibilities from 2.25 MMBOE to 4.5 MMBOE per governmental section
  • Logs appear similar to Silo Field in the DJ Basin
  • Competitors have completed the land play – dominant position Shell Oil, also significant leaseholds by Continental, Quicksilver, and EOG
  • Industry trades of prime Niobrara leases have recently established values from $2,000 to $6,000 per net acre
  • Almost all new fee leases – 55% are five year primary term with optional 5 year extensions; 20% are straight 5 year term; 25% are 3 year term with variable extension options – title and lease administration to major company standards (approximately 25% are topleases vesting within a few months)
  • Fracture Analysis Synthesis Study completed on region by industry expert – available to purchaser
  • Sellers own and operate Buck Peak, Grassy Creek, and Illes Dome fields in the immediate area, producing over 225 gross BOPD, and a significant acreage and production position in the Wattenberg Field of the DJ Basin – producing wells and DJ position available by separate negotiation

Next Energy, LLC, in association with HRM Resources, LLC, is offering for sale the captioned newly acquired oil and gas lease position in one of the two best Niobrara oil target areas, based on historic direct evidence and natural fracturing. HRM’s team was in fact a previous operator of the analogue Silo Field. This position will likely be committed to a sales process through one of the major industry sale advisors within two weeks. The sellers will seek the best offer combination of price per acre, retained net revenue, and retained working interest with partial carry – from a capable buyer experienced with current shale oil development technology. The current acreage position is shown on the map below.

Inquiries can be most efficiently handled by emailing xxxx as to the contact information and best time to call, and a prompt phone response will be made. Also, if you are interested in HRM’s production and DJ package, and/or being contacted on other shale oil project offerings in the future, please respond by email.

91

George: I have mineral rights in the same area near Oak Creek and have received an offer from SWEPI and have consulted an attorney. Give me a call at (EDITED - Please use the private messaging system for contact information) if you would like more information.

George Hageman said:

Hello everyone, I would like to thank you all for your discussion topic and your responses – they are timely and have been quite informative. I’ve entered the game a little later than most it seems.

I have about 400 acres in Section 20, Township 4, Range 86 near Oak Creek, Colorado and recently, I’ve been contacted by Shell offering a paid up oil and gas lease. The terms are $250/acre 3+2 years and 17.5% royalty after expenses as I’m sure is the standard lease they start with. I’m not real happy with the text of this lease especially after having read much of the information I’ve been able to find on the Internet concerning these types of leases. However, not being well versed in legalese, I find the whole thing a bit confusing.

Has anyone successfully negotiated a lease that is more favorable to the lessor than the initial lease offered by Shell? If you have, what changes did you insist on? Did you use a lawyer local to the area in the negotiations? Were you happy with the resulting negotiations and results? Any information concerning your final lease or the changes you made, the lawyer you used, and your negotiating methods would be greatly appreciated.

Best regards,

George Hageman

92

Has anyone received an offer from Springfield Oil? I can’t figure out if they are an oil company or a land office. Does anyone know anything about this company?

Thanks, Dianne

93

Most recent - Petro Hunt and Quicksilver offers

94

I am currently being held hostage by Swepi as they went forward and recorded their supposed Paid-Up Lease in Moffat County only to find from their title search that my interests could not be used by them. I have been waiting to receive a Release of that Lease for approximately 2 months now even after providing them with my own form of document for their convenience to use. I keep being told that they have submitted the paperwork to Shell for signature and when M&L Land Services receives same, it will be submitted for filing and recording, yet to date, and with regard to that also, I cannot obtain any specific time, any copies of any related correspondence or direct contact information from them so that I can follow up on this matter. Does anyone know how to expedite this mess I am in or who I could contact in order to get out from under and continue to negotiate the leasing of my interests with any other possible interested parties? Thanks for your assistance, Jamie

95

Any Atty friends? A letter from an Atty informing them (MJ Land Services and Swepi) you intend to sue for release of lease should light a fire. Given your net mineral interest and probable alternate lease offers… I note that Quicksilver has applied for a permit to drill on Section 24 - had been operated by Foundation Energy until recently.

96

Jani1984 - I too currently have a lease offer from Swepi. Would you be willing to share whom you have contacted as an attorney? I have had trouble finding a lawyer who is available. I would be happy to call you but wanted to receive your permission first.

Thank you

jani1984 said:

George: I have mineral rights in the same area near Oak Creek and have received an offer from SWEPI and have consulted an attorney. Give me a call at xxxx if you would like more information.

George Hageman said:

Hello everyone, I would like to thank you all for your discussion topic and your responses - they are timely and have been quite informative. I’ve entered the game a little later than most it seems.

I have about 400 acres in SEC 20-4-86 near Oak Creek Colorado and recently, I’ve been contacted by Shell offering a paid up oil and gas lease. The terms are $250/acre 3+2 years and 17.5% royalty after expenses as I’m sure is the standard lease they start with. I’m not real happy with the text of this lease especially after having read much of the information I’ve been able to find on the Internet concerning these types of leases. However, not being well versed in legalese, I find the whole thing a bit confusing.

Has anyone successfully negotiated a lease that is more favorable to the lessor than the initial lease offered by Shell? If you have, what changes did you insist on? Did you use a lawyer local to the area in the negotiations? Were you happy with the resulting negotiations and results? Any information concerning your final lease or the changes you made, the lawyer you used, and, your negotiating methods would be greatly appreciated.

Best regards,

George Hageman

97

I’ve found several lawyers in the Craig/Steamboat area, I’ve decided to go with Ralph Cantafio in Steamboat Springs. His website is at: http://www.cantafiolaw.com. I’ve had a good initial conversation with him over the phone, and I think that he will be perfect for the job. He has also written several papers on the subject of oil/gas leasing that are available in pdf form at his website. I’m in the process of reading them but at first blush they seem a good read with valuable information.

There were others in the Steamboat/Craig area. Thomas Thornberry in Craig Thomas C Thornberry 555 Breeze St # 250 Craig, Colorado 81625 (970) 824-7057

I think would be an excellent choice, however he is not taking on any new oil/gas clients at the present time.

In Denver I found a Michael Williams. He responded well to my questions about his practice and experience. His rates were fair I think. You can reach him at:

Michael C. Williams, Esq. DENVER: 1660 Lincoln St. #2330, Denver CO 80264 Phone: (720)-214-1861 Fax 303-265-9652

Sherri Sweers at Feldmann Nagel et al responded well to questions but does not have the experience level yet. I have heard that this law firm does not have a great reputation, but I do not have any personal experience with them at this time.

Sherri L. Sweers, L.L.C. Feldmann Nagel Brauchler & Weeden (CO Division) Feldmann Nagel, LLC P.O.Box 775628 Steamboat Springs, CO 80477 ssweers@feldmann-nagel.com (970) 879-8616

98

Thanks so much, George, for that information. I have been held hostage by M&L Land Services, Swepi, and Shell because they recorded the Paid-Up Lease when my signature was a photocopy, not an actual penned signing. The original documents were being held by my bank pending receipt of any monies paid as rent but due to the title search, they learned that my interests were not available to them. So now here I sit awaiting for about 2 months, after which I waited 2 months for their title search, for a signed Release form to get out from under what I call a bogus lease that was submitted for recordation. I have communicated to M&L that my lawyer is going to write, so it was just last week that I was told the Release is forthcoming soon. When I ask for contact information for my attorney to use, they never provide it and just tell me that the form is being submitted for Shell to sign and could be in a week or so. I’ve had it with them, so I will unleash my lawyer upon them if I do not receive the proper paperwork this week. PLEASE BEWARE… I mean you should know what you own and how many acres, etc., so their provisions, I believe, are unnecessary and anyone should get at least a payment in good faith, or held in escrow or whatever. Please be so very careful… and again, all this interaction in this forum is so helpful…

99

Thanks to everyone that has contributed. This has turned into an insightful forum thread.

One of your cohorts finally created a county group. You guys can all join it here:

http://www.mineralrightsforum.com/group/moffatcountyco

It will be easy to add comments and breakout different topics in multiple discussions relating to your county.

Best of luck to everyone,

Reagan

100

My 88-year-old mother is being asked to lease her mineral rights in Moffat County in Craig, though they are already leased by Kaiser Francis Oil. Is there anything she can do to sub-lease the areas these other oil companies are interested in leasing with a nice bonus per acre and a 16 percent royalty? Sorry, I’m not an oil expert or gas expert. She currently has two working wells on her property but these other oil companies seem to think there is much more available that they are willing to speculate upon. What does one do? Thanks so much, David Fancourt Agee.