I inherited some mineral rights from my grandmother, so I’m fairly new with this. I recieved an offer for a lease at Twn 159 Range 102, sec 26 & 27 for $200 per mineral acre and 16.67 royalty for a 5 year lease. I know I’m new, but this seems low just from what I’ve browsed and read. I would appreciate any advice or information that any of you have. Thank you.
Got the same offer in sec.34
Does the offer seem low to you as well? I have no point of reference.
Hold out. That offer is terrible. You can shop your lease yourself. You do not have to deal solely with the potential driller.
Thank you. I will definitely hold out. I’d like to get a better understanding of what kind of value this area has, but I’m not having any luck.
Personally, I would only do a three year lease.
Thank you. I appreciate the suggestion.
This is really low. During the last oil slump we received 1875 and 20% royalty
Yes, low offer. Nothing more than 3 years for sure.
We also got the same offer
Very low. Get bids from a few land people and play them off each other. Worked for me
Thank you for all of your input. I’m going to do alot more reading and not rush into any decision.
Also I would not sign a new lease without a vertical and horizontal pugh clause. 20% cost free seems to be the normal in the Bakken and I see others are getting 1000 to 2000 per acre for signing bonus. Another rout to go is to start your own oil and gas leasing company and lease some or all of your and maybe your family’s minerals for a flat $10 and as high a cost free royalty you would like, 40%? Your company could be a non participating model and hold a small % as overriding royalty to make its money. The draw back to that rout is you do not get a large singing bonus, and you run the risk of over burdening the spacing unit with high royalties and may cause the location to be undesirable to the operator to drill. Just an idea and there might be other reasons for not doing this that a someone with leasing expertise might know. I started a leasing company and top leased for 40% from me and my siblings. It seemed to me to be the best way to go but the top leases never took effect.
Is there a percentage that a company need to have to drill to your mineral rights? My cousins and I have 480 mineral Arce and if accouple go with a company can they drill?
Rose, the operator typically needs to have a simple majority of the leasehold in a spacing unit (typically 1280 acres) or the support of other working interest owners in that unit to have “operatorship” over that specific unit.