Absolutely DO NOTHING until contacting a good oil/gas attorney - land men can be very dishonest - not all, but a lot of them. The signing bonus should be for several hundred if not thousands of dollars for your area - a 2 year lease with 25% production free royalty. An attorney will protect you.
This maybe a silly question but, what is the size of the production unit on a vertical well?
I own mineral rights to 40 acres in Township 159 North, R99West, Section 34 not far Williston, ND. Just received a lease offer from Diamond Resources (says he represents Continental) for $1,000/acre signing bonus and 3/16 royalty ratio (18.75%) with a 3 year term. Should a negotiate for more $/acre and 20%?
Karen McAndrews said:
We just signed leases in the Bakken with Diamond. They are a very reputable company, but you should definitely negotiate your own terms. Don't sign the lease they send you until you have gotten the terms you want. My Daddy was a landman/attorney and my brother writes the software for the ocean floor seismic surveying so we had good info. Daddy is gone, but I have a lawyer's mouth on me. LOL - I can give you the name of the landman (lady) that helped us and the terms we got if you want. TAKE YOUR TIME. Don't get hasty. They want what you have. We negotiated for awhile, very detailed. There are more things than just the money to consider. I will be glad to share more info if you need it.
Patricia:
Looking at the GIS map, it appears that Samson Resources has two laterals just South of your mineral area. I have no information as to the production figures on these two wells but they are currently active. I would definately negotiate for a higher bonus and 20% royalty. The 3 year lease term is good. Do some research in regards to these wells in close proximity to your mineral area as this will have a great impact on your bargining power. Don't and I repeat don't get in a hurry to sign a lease. Continental is a very large operator in the Bakken and if they are interested, they will negotiate with you. Again, don't be in a rush to sign as this would be a mistake. Good luck.
Patricia Aarsvold said:
I own mineral rights to 40 acres in Township 159 North, R99West, Section 34 not far Williston, ND. Just received a lease offer from Diamond Resources (says he represents Continental) for $1,000/acre signing bonus and 3/16 royalty ratio (18.75%) with a 3 year term. Should a negotiate for more $/acre and 20%?
Karen McAndrews said:We just signed leases in the Bakken with Diamond. They are a very reputable company, but you should definitely negotiate your own terms. Don't sign the lease they send you until you have gotten the terms you want. My Daddy was a landman/attorney and my brother writes the software for the ocean floor seismic surveying so we had good info. Daddy is gone, but I have a lawyer's mouth on me. LOL - I can give you the name of the landman (lady) that helped us and the terms we got if you want. TAKE YOUR TIME. Don't get hasty. They want what you have. We negotiated for awhile, very detailed. There are more things than just the money to consider. I will be glad to share more info if you need it.
Charles, thanks for the help. Unfortunately, I am a novice and have no idea what I should be looking for when I research a well, nor where to look for the info I need. Any suggestions? I would like to have current info before I make a counter-offer. Also, my cousin owns the adjoining 40 acres and her lease with Petro Hunt just expired so the Diamond/Continental landman has been in touch with her, too. Should we negotiate the terms of the two new leases together (for total of 80 acres) as a bloc? Do more acres give us more leverage?
charles s mallory said:
Patricia:
Looking at the GIS map, it appears that Samson Resources has two laterals just South of your mineral area. I have no information as to the production figures on these two wells but they are currently active. I would definately negotiate for a higher bonus and 20% royalty. The 3 year lease term is good. Do some research in regards to these wells in close proximity to your mineral area as this will have a great impact on your bargining power. Don't and I repeat don't get in a hurry to sign a lease. Continental is a very large operator in the Bakken and if they are interested, they will negotiate with you. Again, don't be in a rush to sign as this would be a mistake. Good luck.
Patricia Aarsvold said:I own mineral rights to 40 acres in Township 159 North, R99West, Section 34 not far Williston, ND. Just received a lease offer from Diamond Resources (says he represents Continental) for $1,000/acre signing bonus and 3/16 royalty ratio (18.75%) with a 3 year term. Should a negotiate for more $/acre and 20%?
Karen McAndrews said:We just signed leases in the Bakken with Diamond. They are a very reputable company, but you should definitely negotiate your own terms. Don't sign the lease they send you until you have gotten the terms you want. My Daddy was a landman/attorney and my brother writes the software for the ocean floor seismic surveying so we had good info. Daddy is gone, but I have a lawyer's mouth on me. LOL - I can give you the name of the landman (lady) that helped us and the terms we got if you want. TAKE YOUR TIME. Don't get hasty. They want what you have. We negotiated for awhile, very detailed. There are more things than just the money to consider. I will be glad to share more info if you need it.
Patricia:
This would be a good idea in opinion if both of you could work in conjunction in these negotiations even though each will stand on it's own. Bonuses are very important but the royalty % is what you will paid by over the long haul so definately 20%. Again, take your time and let them come to you with their offers but make sure not to get "low balled" on the amount of bonus money.
'
Patricia Aarsvold said:
Charles, thanks for the help. Unfortunately, I am a novice and have no idea what I should be looking for when I research a well, nor where to look for the info I need. Any suggestions? I would like to have current info before I make a counter-offer. Also, my cousin owns the adjoining 40 acres and her lease with Petro Hunt just expired so the Diamond/Continental landman has been in touch with her, too. Should we negotiate the terms of the two new leases together (for total of 80 acres) as a bloc? Do more acres give us more leverage?
charles s mallory said:Patricia:
Looking at the GIS map, it appears that Samson Resources has two laterals just South of your mineral area. I have no information as to the production figures on these two wells but they are currently active. I would definately negotiate for a higher bonus and 20% royalty. The 3 year lease term is good. Do some research in regards to these wells in close proximity to your mineral area as this will have a great impact on your bargining power. Don't and I repeat don't get in a hurry to sign a lease. Continental is a very large operator in the Bakken and if they are interested, they will negotiate with you. Again, don't be in a rush to sign as this would be a mistake. Good luck.
Patricia Aarsvold said:I own mineral rights to 40 acres in Township 159 North, R99West, Section 34 not far Williston, ND. Just received a lease offer from Diamond Resources (says he represents Continental) for $1,000/acre signing bonus and 3/16 royalty ratio (18.75%) with a 3 year term. Should a negotiate for more $/acre and 20%?
Karen McAndrews said:We just signed leases in the Bakken with Diamond. They are a very reputable company, but you should definitely negotiate your own terms. Don't sign the lease they send you until you have gotten the terms you want. My Daddy was a landman/attorney and my brother writes the software for the ocean floor seismic surveying so we had good info. Daddy is gone, but I have a lawyer's mouth on me. LOL - I can give you the name of the landman (lady) that helped us and the terms we got if you want. TAKE YOUR TIME. Don't get hasty. They want what you have. We negotiated for awhile, very detailed. There are more things than just the money to consider. I will be glad to share more info if you need it.
Be sure to consult an oil/gas attorney - lease hounds (most anyway) are NOT to be trusted.
I have another question. The lease to my land in ND ran out in January 2012. I called Diamond Resources and asked for a release of lease. At first they said yes and then called back to say since the lease had ran out there was no reason for a release of lease as anyone wishing to lease it would see that it was free. Is this true or a common practice
Gus:
If your lease has expired, then landmen researching records at the county clerk's office will discover that the area is free for lease.
A release is much more preferable. A release of a dead lease is one less thorn to a marketable title.
Thank You
charles s mallory said:
Gus:
If your lease has expired, then landmen researching records at the county clerk's office will discover that the area is free for lease.