What are some of the lease rates / terms, as of mid-2011; specifically in McKenzie County, ND...?
I previously leased 300 acres in Dec. 2008 at $375/acre at 15% royalty, with a 3-year + 2 yr extension. Now, an addition 23 mineral acres were found, the well just started producing, but will be on the Confidential list for another 3 months. The oil production company sent me to their leasing agent/company, and their initial lease offer is: $2,000/acre with a 20% royalty, with a 3-year lease, with no extention.
I have read that some mineral owners are now getting as high as $8,000 - $10,000 - $12,000 per acre.
I am also considering, not leasing and becoming a WIO (Working Interest Owner), paying for the drilling of these acres, and production costs, and retaining the 100% 'royalty'/production profits. It is quite clear, in speaking to the production company, that they are using "high costs" and fear, to discourage me from being a WIO. If that is true, then why are companies scrambling to PAY for leases, and only retaining 80% of the production for themselves....Why wouldn't I do it, when I get to keep 100%, and I don't have to pay for a lease?!
Sounds to me, that they don't want the profit 'competition'.