Looking for advice on lease offer for house property

Colorado Mineral Rights Weld County, CO
1

Hi there,

I received a letter today from Stonebriar Energy (on behalf of Bison Oil and Gas) wanting an oil and gas lease for my land in Section 5, Township 10 North, Range 61 West, at $500 per net mineral acre, retaining a 19.00% royalty interest. 3 year lease with a 2 year option to extend

I have zero knowledge on this subject. I’ve browsed through this forum, but assume I know next to nothing

I’m not interested in the money, but given Colorado has forced pooling, I’m concerned about if I just were to say no only to get forced pooled into worse terms. If that’s the case, I’d rather negotiate the best deal possible. To be clear, the land they’re wanting to lease is where my house is so 100% of my priorities is to keep my house in good condition. I’ve only got like 0.14 acres of land, so I realize that both gives me very little bargaining power, but also it means the money from this is gonna be zilch and all I care about is my house

I welcome all thoughts on this. I’m not looking for anyone to make decisions for me, I’m just wanting to get myself as much understanding as possible so I can avoid making bad decisions here. So far all I’ve done is replied to their email acknowledging the letter and asking if they had anymore information, and in return I received a copy of the lease form template they use to look over but… truthfully given I know nothing on this subject that doesn’t do a ton of good

If you’d like I can share the text of the lease template that was shared with me

Again, money isn’t the concern here. The concern is I’d rather say no to avoid exposing my house to any risks, but I’m worried I don’t really have an option when it comes to saying no

You all see real knowledgeable and friendly, so I welcome any input you have

Let me know if there’s any further information you’d like and I’ll do my best to provide it

Hope you all have a great day (sorry if I’ve phrased anything oddly or I’m not making sense at any point, it’s been a long week for me and this all has me a bit flustered if I’m honest)

2

Welcome to the forum. I am going to move this to Colorado-Weld County for you so local folks can answer.

Their interest is most likely for a horizontal well(s) which would probably not have a location near your home, but you need to check the lease language for a clause protecting anything within 200’ of an existing house or barn. If you are in the town of Grove, they will most likely have the location outside of town and drill under the town acreage.

It would be wise to invest in a good oil and gas attorney to review the lease before signing as the draft leases are rarely in favor of the mineral owner and need significant changes. You do need to protect your surface as well as your minerals. I would ask what they are offering at 1/5th just to see what they say. Also, not a fan of the two year extensions, so I do not allow them.

There are other agents leasing in the area, so you might get more offers. Only one lease has been filed in Sec 5, so the agents have a lot more acreage to lease.