I have 3.3 acres in Burke County,ND I have been asked to lease them. I don't know anything about this so what is a fair amount? they are sec.7&18 of 160N-94W if you know about leasing mineral rights please help me. Kim Lamphear
Kim:
I looked over the previous State Auction site and it appears that minerals in T159;R92 went from $300 - $620/acre (August Auction); In May, minerals leased for $700 - 900/acre in T161/R94. Keep in mind, these amounts are going to be higher than what you will recieve but it will give you a figure to work with in your negotiations. Since your net minerals are only 3.3 acres, this will probably weaken your negotiation power but I would think that something in the neighborhood of $700/acre would be a fair bonus. I would ask for 20% royalty with a lease term of no more than 3 years. The bonus is real negotiable figure as the royalty and lease term is the most important in my opinion. Good luck.
I received a letter from Open Range, Inc. They currently hold an Oil and Gas lease on my property in Burke Co(Twnship 163, Range 92, Sections 6,7 and Twnship 164, Range 92, Sections 31,32) until May 2013. In the letter they state they have obtained well licenses for 2 spacing units at Twnship 163, Range 92, Sections 5 and 8 and go on to site several difficulties in establishing a spacing unit for drilling of my property so they want to extend my lease, which is set to expire on 5/13/2013, for 3 more years and are offering $150/acre for 37.57 net acres at 1/6 royalty-signing date of 12/21/2011. My question is why do they need to release now when the lease is not up until 2013 and is 150/acre with 1/6 royalty a lowball offer and do they hope we will release before any production in this area so they can pay less for lease.
Wendy, I would wait and see what turns up. Usually you are in a stronger negotiating position after the lease expires. Your minerals in the ground are an appreciating asset, like gold. When you are leased your appreciating asset becomes the company who leased your minerals appreciating asset. The lease bonus value of your minerals can appreciate to 10 times their present value in 4 years, and you may be able to negotiate a higher royalty then, which is where the real money would be. Yes, I think you could class that as a lowball offer.
Wendy:
Ditto, to RW's post. He is correct in regards to waiting and watching this changing area. One fact, I haven't seen any bonus rates go down over the past few years in any of these areas in ND.
Thank you for the information
charles s mallory said:
Kim:
I looked over the previous State Auction site and it appears that minerals in T159;R92 went from $300 - $620/acre (August Auction); In May, minerals leased for $700 - 900/acre in T161/R94. Keep in mind, these amounts are going to be higher than what you will recieve but it will give you a figure to work with in your negotiations. Since your net minerals are only 3.3 acres, this will probably weaken your negotiation power but I would think that something in the neighborhood of $700/acre would be a fair bonus. I would ask for 20% royalty with a lease term of no more than 3 years. The bonus is real negotiable figure as the royalty and lease term is the most important in my opinion. Good luck.
Kim, you may be able to find additional information in the county groups of this site. Click where it says gproups at the top of this page and drill in from the drop down. You may have already found it but it is often overlooked, as is the mineral help. The mineral help is pretty general but after reading through it you may know what specific questions to ask. I think it's alot easier to get the answers you need if you are armed with the right questions.