I have land in Township 143 that the lease will expire in October. No drilling to date. What are going rates for lease, bonus, and commission? Is Toplease a good idea? What leasing companies are good to work with and fair?
Amy:
I will reply to the "top lease" part of your post. Yes, I consider top leasing a good option as I have top leased several times, each for alot more bonus money and better % royalty and less time on the lease. I will advise you to look over your current lease and make the neccessary changes before leasing such as adding Pugh Clauses if none are in your current lease.
Very good on the pugh clause!
Companies actively drilling in various ranges of Township 143 include Oxy, Hess, Slawson, and Burlington Resources. Marathon and Continetal have also drilled some nearby in Twp 144. Some of these companies may lease on their own, while most will hire another firm to do the leasing. So if you're approached by a company whose name you don't recognize then ask whom they are leasing for.
It is very hard to say what is the "going rate". In part it depends upon how far east or west your minerals are in Twp 143. There are some great wells being drilled in Twp 143, Ranges 95, 96, and 97. In those areas I would ask for $2500 per acre and 20% royalty at minimum. If your minerals are further east then expect a lower bonus but still hold out for the 20% royalty. Good luck. Hope you secure a good deal.
What do you think, Twp 143 No., Range 94 W, Section 18. We seem to be in a bidding war now, with current close to $1K, toplease, 5 months out.
I think you should wait 5 months, Amy. I don’t think you have anywhere to go but up in the next 6 months. The toplease with better terms would be void I think if they were able to drill and extend the original lease. I think if you go the toplease route, you need a ratification of the earlier lease with the new better terms and then a top lease, just in case they get it drilled in the next 5 months. If I am wrong on this I hope someone will correct me.
Well? Dying to know how it worked out for you as I am in a very similar position.
it did work out okay.... we did end up with the top lease in the range listed above, however, don't be too greedy, we almost had both bidders walk out on us at the end and have nothing. but again, then you could go ahead and lease without a top lease. i don't know what current leases are going for now....
Amy:
Most likely, these landmen made you believe that they would walk but in reality, their need to aquire your mineral interests was much greater than your need to lease these minerals. Most likely, these landmen are working for companies trying to aquire the majority of the acreages in this section. Bottom line, if your satisfied with the lease terms, that's what counts. As I said earlier, I have top leased several times over the years, but when I do it, the terms and conditions are in my favor. Good luck on your lease and hope you get a great well.
Amy said:
it did work out okay.... we did end up with the top lease in the range listed above, however, don't be too greedy, we almost had both bidders walk out on us at the end and have nothing. but again, then you could go ahead and lease without a top lease. i don't know what current leases are going for now....
Many people do not realize that a landman is negotiating from hello. When a landman in the past has told me I have to decide to take their offer or not by friday, I tell them the answer is automatically no!
Thanks for the update. I did sign the toplease with the same company that I was with before. They are already active in the area and I wonder if it was "plan b" just in case they could not HBP me.
Glad it worked out okay for you; I am still fairly nervous about it. Wondering if I was wasting my time and attorney money signing the toplease for them to come back and say "nevermind, we got you held by production."
Amy said:
it did work out okay.... we did end up with the top lease in the range listed above, however, don't be too greedy, we almost had both bidders walk out on us at the end and have nothing. but again, then you could go ahead and lease without a top lease. i don't know what current leases are going for now....
Yeah, we were worried about that too, but it turned out for the good....