Lease renewal Dunn County North Dakota, Bakken Formation

General Mineral Rights Discussion
1

I am being asked to renew my lease for my oil and mineral rights which are going to expire this Sept. My rights are on the Bakken Formation, Dunn County, North Dakota. Do you have an approximate range I should be negotiating for the bonus, years and percentage?

2

I’m not certain about Dunn County, but several leases I have seen have 2 and 3 year extensions. On price, it all depends on how bad they want the lease . Are they drilling close to your property?

3

Thank you for replying Reagan. I have been reading quite a wide range of prices but haven’t found anything re:Dunn County. I’m not sure how far from me they are drilling as I have never been to North Dakota but I have been told there is a producing well approx. 2 miles from where my mineral rights are located. Most of what I’ve read say 4 year extension, but, 3 is not unreasonable.

Reagan Thompson said:

I’m not certain about Dunn County, but several leases I have seen have 2 and 3 year extensions. On price, it all depends on how bad they want the lease . Are they drilling close to your property?

4

Thank you Debra for all the info… Sharon

Debra Ganske said:

Please also review the following document:

http://www.rigzone.com/data/analysis/2010_Q1_landRigReview.pdf

Pay particular attention to the information starting on Page 6. Here’s a copy and paste:

North Dakota’s recent oil and gas lease sales have been off the charts. The sale held in November 2009 fetched record high proceeds of $71.6 MM, and the February 2010 sale fetched $47.4 MM. To put this in perspective, these two lease sales alone generated proceeds that exceed the sum of the 55 prior lease sales in North Dakota going back to 1995. The hottest counties are commanding big premiums. In November, Mountrail leases averaged around $3,600 in bonus/acre, and McKenzie county acreage led the state in February 2010 with an average near $2,160 bonus/acre – both well above historical averages. While acreage uptake has been impressive, much of the record proceeds have been due to the ramp in bonus/acre – an indication of increased operator interest and competition for land…

* * *

The top three counties by rig count account for roughly 2/3rds of the rigs active in the Bakken region today and include Mountrail, Dunn and McKenzie counties…