we own mineral rights in sheridan county, montana. We received an offer from Western Land Services for $75.00/acre and 15% royalities lease is 5 years. It is section 36 Township 34 N 53 E. Has anyone heard of this company? Is this a fair lease? We are from out of state and new to this. Is there any activity in this area?
denmarkwi:
Western Land Services is most likely a lease broker who is in the process of leasing minerals for an oil operator or will lease from individuals and sell these leases to an oil operator. The $75/acre bonus is very low for this area. Currently, no major drilling activities in the area but various wells does exist and many temp. spacing and some drilling permits are also in the area. The forecasters predict that this area will see increased drilling activity in 2012 and 2013. I have minerals in T31N;R59E and the acreage is currently temp. spaced by Marathon Oil Company. You didn't state your total net mineral acres but you need to market them before signing any leases. I do know that Marathon has numerous acres in the area as well as other operators. You can google "Montana Mineral Management" and view the past State mineral auctions for this area. Also, you will see the companies that bidded on these leases . Keep in mind that the $/acre will be much higher than what you can expect to recieve but it will give you a figure to work with in your negotiations. Now, back to your lease offer, I would start out with 20% royalty and never agree to a lease term longer than 3 years. Be sure and read various posts on this forum regarding leasing as there is much information about the subject. Finally, you can google "eser.org" and put in your mineral description (T3N;R53E;Section 36) and view the wells in your area. Good luck.
Our Baker Mineral Trust is in final lease negotiations with Samson for 35 mineral acres in Sheridan Twn 33N-55E for $550/acre bonus, 19% royalty for 3 years, and 2 year extension with $600/acre bonus. Enterprise info@eerl.ca is also drilling this area. So your offer may be very low. Whiting also with interest in Sheridan told us they were not interested because our property is too far north.
John, what is the company who made you the offer?
John Baldridge of Baseline Minerals, Inc ; 605-224-8889, brokered our lease with Samson Resources Company, Tulsa, OK. However, Samson was bought this month by New York-based KKR’s energy and infrastructure business. Therefore I do not know if Baseline will still be a broker. Samson was founded by petroleum engineer Charles Schusterman, who died in 2000. His daughter, Stacy Schusterman, became co-chief executive officer in 1999, assumed full control in 2005, and apparently may continue as CEO. Hope this helps.
Interesting- K.K.R.’s Energy Billionaire's Club- http://dealbook.nytimes.com/2011/11/25/k-k-r-s-energy-billionaires-club/
about Western Land Services
Read about them here- http://www.petoskeynews.com/news/null-mineral-rights-lessors-want-a...