There seems to be interest in O & G exploration in Kiowa County, CO. We have been offered a lease of our mineral rights at $50 an acre with an 1/8th royalty. The terms include a 5 year lease with a 5 year option. It seems as if this would tie up the Mineral Rights for a long time. The Land Service company that we are dealing with says that the company gives them very little room for negotiations. Any comments about this offer and/or the activity in this area?
Did you find a better deal?
I got an offer for my minerals in sec. 15 t20s r.44 west , they offered me a choice of $75.00 @ 1/8 or $60.00 @ 15% not a good deal also 5years. I asked for a a different deal but, they havnt gotten baack yet.
You can call me at 608 934 5418
Our initial offer in July for mineral rights was only $25 an acre with the other terms the same as Bob Bliss. The land involved with us is in Kiowa County and located in the area of T18-20S R51 West. The terms are not as good as some I have seen on the forum including Gary Speckman. Where is Bob Bliss’ land located?
Our mineral rights are: Section 33 (South 1/2) T20s R45w. I also made an offer, but MacDonald Land Services got back to me and said that their client (?) would not budge. I consider their offer (see above) to be greatly in favor of their client considering the interest in Kiowa county, even though most of the recent Kiowa permits, that I looked at, seem to be north of Brandon according to COGCC. It appears that there is one recently approved drilling permit south of Brandon (24 T20s R46w). So I’m just waiting for a while to see what develops.
Harold Higginbottom said:
Our initial offer in July for mineral rights was only $25 an acre with the other terms the same as Bob Bliss. The land involved with us is in Kiowa County and located in the area of T18-20S R51 West. The terms are not as good as some I have seen on the forum including Gary Speckman. Where is Bob Bliss' land located?
I should clarify that my sister and I share the rights. The total offer was for $25 to each of us, so the overall offer was for $50 per acre at 1/8 royalty for 5 yrs. with 5 yr. extension. Our offer was from Diamond Resources of ND and we do not know who they represent. We have not taken any action.
I am appalled by these lowball offers you folks have received! No one should ever lease for over 3 years. I won’t agree to an extension. If they don’t drill in three years, they can release the property at the going rate after the lease is over, if I am still interested in leasing to them. $50 an acre is really cheap and a 1/8 royalty is what was being paid in Texas in 1975! It sounds like these people are speculators hoping to make big bucks from flipping the leases to an operator. Personally I wouldn’t lease my land under the conditions these people have offered. Their saying the company won’t budge is just part of their lowball strategy. Have any successful wells been drilled in your part of the county?
Hi Tex,
Just got a call from the land company. Upped their offer to $75 per acre, but stayed the same on the 1/8th royalties and 5/5 lease options. I said that I would look into their offer, but made no promises. Talked to the COGCC people today and got some real good info about their website. I'll continue to do my research. Just three miles away from our mineral rights is a producing well that has been there a while.
6th Generation Texan said:
I am appalled by these lowball offers you folks have received! No one should ever lease for over 3 years. I won't agree to an extension. If they don't drill in three years, they can release the property at the going rate after the lease is over, if I am still interested in leasing to them. $50 an acre is really cheap and a 1/8 royalty is what was being paid in Texas in 1975! It sounds like these people are speculators hoping to make big bucks from flipping the leases to an operator. Personally I wouldn't lease my land under the conditions these people have offered. Their saying the company won't budge is just part of their lowball strategy. Have any successful wells been drilled in your part of the county?
To Mr. Bliss and everyone, it’s always good to get a competetive offer. If you are dealing with 1 company they make a lowball offer and stick to it. If they know you are seeking other offers they become afraid of losing your acres to someone elses pitiful offer that is 10% better than theirs, IE $55 instead of $50, or 15% instead of 1/8 which is 12.5%. The operator of the well makes 0 dollars off your acres if someone else holds your lease and participates.
Bob Bliss said:
Hi Tex,
Just got a call from the land company. Upped their offer to $75 per acre, but stayed the same on the 1/8th royalties and 5/5 lease options. I said that I would look into their offer, but made no promises. Talked to the COGCC people today and got some real good info about their website. I'll continue to do my research. Just three miles away from our mineral rights is a producing well that has been there a while.
6th Generation Texan said:I am appalled by these lowball offers you folks have received! No one should ever lease for over 3 years. I won't agree to an extension. If they don't drill in three years, they can release the property at the going rate after the lease is over, if I am still interested in leasing to them. $50 an acre is really cheap and a 1/8 royalty is what was being paid in Texas in 1975! It sounds like these people are speculators hoping to make big bucks from flipping the leases to an operator. Personally I wouldn't lease my land under the conditions these people have offered. Their saying the company won't budge is just part of their lowball strategy. Have any successful wells been drilled in your part of the county?
Two thoughts:
5 years seems "not unusual" (ND does this)
1/8 seems a little low but I am not familiar with your area.
A sample of prices in North Dakota can be found at:
http://www.land.nd.gov select "Minerals Home" under 'Minerals Management'
then look at 'Oil and Gas Lease Auction Results'
http://www.ndoil.org/?id=184 is interesting
https://www.dmr.nd.gov/oilgas/leasingconsiderations.pdf Explains legalities of leases.
Look and see if CO has a site similar to https://www.dmr.nd.gov/oilgas/
Check the math carefully. This could be , for example 160 acres each of you having a half interest. I have seen the calculation $25 x your 80 acres = 2000 for you and the same for your sister. Make sure they are offering 50 for 160 acres = 8000
Thanks for the heads-up on the calculation. We will clarify this.
Mike said:
Check the math carefully. This could be , for example 160 acres each of you having a half interest.
I have seen the calculation $25 x your 80 acres = 2000 for you and the same for your sister.
Make sure they are offering 50 for 160 acres = 8000
Hi Bob,
Pitiful, pitiful, just pitiful as Jed Clampett would say! If it were me, I would surely not be any hurry to lease. The offer they made to you is very low. I have been negotiating off and on for a year. If it doesn't work out for me this year, then maybe next. We just have to wait for drilling to pick up and productive wells brought in, then things will change. At least that's my philosophy.
Bob Bliss said:
Hi Tex,
Just got a call from the land company. Upped their offer to $75 per acre, but stayed the same on the 1/8th royalties and 5/5 lease options. I said that I would look into their offer, but made no promises. Talked to the COGCC people today and got some real good info about their website. I'll continue to do my research. Just three miles away from our mineral rights is a producing well that has been there a while.
6th Generation Texan said:I am appalled by these lowball offers you folks have received! No one should ever lease for over 3 years. I won't agree to an extension. If they don't drill in three years, they can release the property at the going rate after the lease is over, if I am still interested in leasing to them. $50 an acre is really cheap and a 1/8 royalty is what was being paid in Texas in 1975! It sounds like these people are speculators hoping to make big bucks from flipping the leases to an operator. Personally I wouldn't lease my land under the conditions these people have offered. Their saying the company won't budge is just part of their lowball strategy. Have any successful wells been drilled in your part of the county?
There is a lease in Kiowa country in the next state auction, it might give a clue as to interest.
http://trustlands.state.co.us/Sections/Minerals/Pages/Auctions.aspx
I also notice one drill site in "progress" in Kiowa county, what they find may influence the value of your lease.
http://cogcc.state.co.us/ COGIS - Drilling Permits
NB: You might also scold the state of Colorado for requiring the use of "Silverlight" to read a public document. You should not have to buy proprietary software (MSFT) to read public records. This could be
a violation ADA.
Hey, really new to all this, my mother has mineral rights in Kiowa county. She was contacted by someone offering $XX/acre and 1/X royalty for 5 years (I dont want to disclose too much on a public forum, lets just say that I was a little underwhelmed by the numbers). I have tried contacting numerous other folks, and have only had a response from one land service, although no hard competitive offers as of yet (I just sent emails and phone messages today). It seems like this whole thing has sprung up really suddenly... I have been looking at other threads from weld and elbert counties, and it seems like they had similar offers to what we are being given a few years ago, only to have the area explode after they found a good deal of oil and gas there. I hope that Kiowa goes through something similar... although I am not sure how long that would take or if it would even happed at all. Any thoughts on how long to hold out?
Hey Joshua,
Lots of interest in Kiowa County right now. MacDonald Land Services is trying to lease a lot of mineral rights. I have talked to a drilling company and to the county folks in Eads. It seems to me that the offers being made are low. I'm not going to make any quick decisions. If you wish to read more go to the Cheyenne County forums and read some of the comments. You can do research at the Colorado Oil and Gas Conservation Commission website as well as the Colorado State Land Board website. The standard offer has been $50 per acre, 1/8th royalty, and 5yr/5yr lease. Most that I have contacted believe this to be very low. However, this is not the Niobrara shale or the Bakken shale or other lucrative shale locations. (At least yet.) Who knows what the situation will be in a few years? Our mineral rights are in the far south Kiowa County and have been there a long, long time with very little activity. Most of the activity that I have found has been north of the Brandon area or northeast of Eads. My recommendation is that you investigate thoroughly before action. This website has tons of info.
Reply to 6th generation Texan:
Right, but Kiowa County is not Texas. Most of the lease offers I'm aware of in Kiowa Co. are in line with those offered in the Dakotas, so no that bad. The hot Niobrara play in the Denver Basin of NE Colo. (comparable to the Dakota play) either outcrops or is absent in Kiowa Co. Most oil and gas in Kiowa comes from Morrow sand channels. The Brandon Field is from Mississippian carbonates and is a nice little field. The Mississippian has very few tests in this area, so that may be what they are looking at. In either case, the new techniques being employed...horizontal drilling and fracking may have some potential in either of these plays.
6th Generation Texan said:
I am appalled by these lowball offers you folks have received! No one should ever lease for over 3 years. I won't agree to an extension. If they don't drill in three years, they can release the property at the going rate after the lease is over, if I am still interested in leasing to them. $50 an acre is really cheap and a 1/8 royalty is what was being paid in Texas in 1975! It sounds like these people are speculators hoping to make big bucks from flipping the leases to an operator. Personally I wouldn't lease my land under the conditions these people have offered. Their saying the company won't budge is just part of their lowball strategy. Have any successful wells been drilled in your part of the county?
Any idea who McDonald’s client is?
Bob Bliss said:
Hey Joshua,
Lots of interest in Kiowa County right now. MacDonald Land Services is trying to lease a lot of mineral rights. I have talked to a drilling company and to the county folks in Eads. It seems to me that the offers being made are low. I'm not going to make any quick decisions. If you wish to read more go to the Cheyenne County forums and read some of the comments. You can do research at the Colorado Oil and Gas Conservation Commission website as well as the Colorado State Land Board website. The standard offer has been $50 per acre, 1/8th royalty, and 5yr/5yr lease. Most that I have contacted believe this to be very low. However, this is not the Niobrara shale or the Bakken shale or other lucrative shale locations. (At least yet.) Who knows what the situation will be in a few years? Our mineral rights are in the far south Kiowa County and have been there a long, long time with very little activity. Most of the activity that I have found has been north of the Brandon area or northeast of Eads. My recommendation is that you investigate thoroughly before action. This website has tons of info.
gary speckman said:
Did you find a better deal?
I got an offer for my minerals in sec. 15 t20s r.44 west , they offered me a choice of $75.00 @ 1/8 or $60.00 @ 15% not a good deal also 5years. I asked for a a different deal but, they havnt gotten baack yet.
You can call me at 608 934 5418
It's awful. We've been offered $300 an acre with 1/8th. Go for more!