We have mineral acres in Sec 29, 30, 31 32. They are up for lease. Anyone know what the going rate is? You information will be appreciated.
Ronald:
Could you provide more specific info such as Township/Range?
Township 158 North, Range 93 West of 5th P.M. Sec 29,30,31,32.
Ronald:
The area you described has wells near in practically all directions. Problem is, I have no info in regards to the production figures on these wells. This can get tricky in regards to setting a fair bonus, etc. on a lease. My suggestion is to contact Gary Hutchinson, a consultant on this forum with much inside knowledge of the area. His number is 303-279-4113. I am almost certain he can provide you with the info you need.
Thank you.
I glanced and some of the wells are older 2008 vintage with the not up to date completion techniques and they are only fair wells. The latest well which I believe probably used up to date production techniques produced 64,000 barrels oil in a year or a little over still flowing and not needing a pump as the other wells do. A good but not great well, it was also the second well in that spacing and it's IP was double the first wells IP. I think your area is better than the bulk of the wells already drilled would indicate. I would say that it is a sure thing under you and I would negotiate the royalty and bonus appropriately. I would not recommend that you be non-consent because the production is not up to the level of making that very attractive unless the operator tries to hold the royalty to 1/6 then you might as well because there is not much difference between 16% statutory royalty and 16.67% lease royalty and 10 years down the road you would be an owner and receive 100% less cost of production. Of course if you have time to learn the oil business, there will be more wells in the future, but even mid term I would not call it a good deal, long term it might be great, if you have alot of free time to learn the business.