I currently have mineral rights leased that will expire in September 2012. They are located in Township 145, Range 95, Section 23. According to the NDIC GIS server map, lots of activity around that area, but nothing so far in that section. Just curious as to what people are being offered in that area. I currently have a well located on Township 145, Range 95, Section 17, that due to spacing, is providing me with 1/6 royalty. That lease agreement was negotiated 2 years ago. Any info would be appreciated. Thanks, Kay
Kay,
My family holds some interests in Township 145, Range 93 that was leased in 2008 at $200/nma, 16.7% royalty. More recently, this year we leased some interests in Township 142, Range 94W for $500/nma, 18% royalty.
Kay,
I have seen higher offers, friend me if you haven’t accepted anything yet. If you have, congrats!
Kay, I don’t have any specifics on lease rates, but from looking at producing wells near you, it’s a great area. Denbury Onshore, Burlington, and Continental are operating near you. If you get the chance to lease again, I would try to get competitive bids from all of them. I would focus on the royalty and try to limit deductions. For me personally, if I were in that area, I wouldn’t lease until my terms were met. In my experience, the offers get a lot better fast when the bit is in the dirt in an area with proven production.
There is also a “now” factor when a well is about to be drilled. Offers come out of the woodworks to participate in a well being drilled now, as opposed to one that might be drilled three or four years from now. DAP56 has kindly offered to make an offer; it might tell you what the trend is even if it doesn’t meet your criteria.
I think you will receive a to-please offer if your lessor/the operator can’t get a well begun in time. I think the usual to-please offer is not in your best interest. Your minerals in the ground have appreciated in the last few years; a to-please will take you out of the market before you get a chance to find out how much. I’m sure you have oil. I wish you luck with the negotiations.
What are you offering? I’ve just been offered $1500/nma, 20% royalty, with an offer to increase the royalty on another Denbury well I have that’s producing. They are offering to increase the royalty on that well from 3/16 to 20%, provided the new well on Section 23 is NOT drilled before the current lease is up. This is a “top lease” offer.
DAP56 said:
Kay,
I have seen higher offers, friend me if you haven’t accepted anything yet. If you have, congrats!
Thanks for your feedback. The landman who called me didn’t like it at all when I let him know that it was in MY BEST interest to let the current lease expire. I told him I wanted to do some “more” research. Forget to mention, that the $1500/nma offer will only pay 15% now & the rest will be paid when the top lease goes into effect, which is in Sept. I have 32 net acres in that section.
r w kennedy said:
Kay, I don’t have any specifics on lease rates, but from looking at producing wells near you, it’s a great area. Denbury Onshore, Burlington and Continental are operating near you. If you get the chance to lease again I would try to get competitive bids from all of them. I would focus on the royalty and try to limit deductions. For me personally if I were in that area, I wouldn’t lease until my terms were met. In my experience, the offers get a lot better fast when the bit is in the dirt in an area with proven production. There is also a “now” factor when a well is about to be drilled. Offers come out of the woodworks to participate in a well being drilled now, opposed to one that might be drilled three or four years from now. DAP56 has kindly offered to make an offer, it might tell you what the trend is even if it doesn’t meet your criteria. I think you will receive a top lease offer if your lessor/the operator can’t get a well begun in time. I think the usual top lease offer is not in your best interest. Your minerals in the ground have appreciated in the last few years, a top lease will take you out of the market before you get a chance to find out how much. I’m sure you have oil, I wish you luck with the negotiations.
Lease just expired 1.12.12 for property in Township 144 Range 92…was leased to XTO but they are not interested in re-lease. Evidently we are a little too far east of the “mature” area. Anyone have a similar situation and any thoughts on how to proceed?