HI MY NAME IS ESTHER WALKER AND I OWN THE MINERAL RIGHTS TO SOME PROPERTY IN BILLINGS NORTH DAKOTA WHICH HAS BEEN UNDER LEASE FOR SOME YEARS TO THE SAME COMPANY.
I AM WONDERING WHAT THE GOING RATE IS AT THIS TIME . ALSO I WOULD LIKE TO KNOW THE BEST WAY TO FIND A GOOD LAND MAN AND AND HOW TO FIND OUT HOW MUCH OIL IS ON THE PROPERTY WHERE MY MINERAL RIGHTS APPLY . IT IS TOWNSHIP 141 NORTH, RANGE 98 WEST OF THE 5TH P.M. THANK YOU
Ms. Walker, I can see your area doesn’t have alot of production history. There is production all around the outside of your TWP and Range. You may have better luck if you are in a border section, as the only producing well I saw closer to the center was a Bakken well that may never pay for itself ( less than 25,000 bbl in over 4 years ). All hope is not lost, the technology is better than that of 4 years ago and they have surely seen more in it than my quick glance. I wouldn’t take anyones word for how much oil there is or isn’t there. They do still drill dry holes, so even the experts can’t be 100% trusted. I don’t know what the going rates are around your property. I would solicit offers from several co’s, to get the best offer. If you have had a few leases with one co, and have a good relationship with them, I would allow them the opportunity to match the best offer. I appreciate a good working relationship, but that is no reason to accept a lower offer than you might get elsewhere. This is business and you have the right and responsibility to get the most you can for your property for yourself and your family. You might check to see if your county has a discussion group on this forum. Sorry that I cannot recommend a landman in N.D. I know of 8 or so, only 1 of whom I would use, and I wouldn’t trust him. Maybe someone else will recommend one. I would certainly check his qualifications and ask for references from other land owners. Now is a good time for your lease to be open again. I wish you luck and a good lease.
I think that the ND State Land and Minerals Management site is a good resource. www.land.nd.gov/minerals/minerals.htm . It gives auction results for the most recent mineral rights auctions for ND state land. At the November auction the average price for a lease in Billings Co. was $2000/min acre. The next auction is May 4
r w kennedy said:
Ms. Walker, I can see your area doesn't have alot of production history. There is production all around the outside of your TWP and Range. You may have better luck if you are in a border section, as the only producing well I saw closer to the center was a Bakken well that may never pay for itself ( less than 25,000 bbl in over 4 years ). All hope is not lost, the technology is better than that of 4 years ago and they have surely seen more in it than my quick glance. I wouldn't take anyones word for how much oil there is or isn't there. They do still drill dry holes, so even the experts can't be 100% trusted. I don't know what the going rates are around your property. I would solicit offers from several co's, to get the best offer. If you have had a few leases with one co, and have a good relationship with them, I would allow them the opportunity to match the best offer. I appreciate a good working relationship, but that is no reason to accept a lower offer than you might get elsewhere. This is business and you have the right and responsibility to get the most you can for your property for yourself and your family. You might check to see if your county has a discussion group on this forum. Sorry that I cannot recommend a landman in N.D. I know of 8 or so, only 1 of whom I would use, and I wouldn't trust him. Maybe someone else will recommend one. I would certainly check his qualifications and ask for references from other land owners. Now is a good time for your lease to be open again. I wish you luck and a good lease.
Andy B---
The state auction websites are not for private mineral interest owners. I work for an oil company and many people have asked me why on this "one website" it says that lands in there area are being leased for $6,500 per acre....
This is a completely different situation. The state owns these lands and are auctioning them off to the highest bidder (auctioning off huge areas of land). The reason companies pay higer prices for these is because there is no title work to be done, it is clean and clear cut. Also, the royalties are better than an interest owner who wants to retain the 20%-- So the average price on that website for the Billings area may be $2,000 per acre on the state auction, but may only be a couple hundred in a private matter depending on the terms of the lease. You can not compare the two.
Oil is oil and the lease is the lease. I can understand that private mineral leases may be more complicated . . . . but more than a 50% discount??? No way!
Andy-- as for private mineral leasing being more complicated...it goes far beyond that. Not only is it more complicated, its expensive and very time consuming.
These acres are being sold in bulk--40 acres here, 160 there, and so on. As I said before, the state owns these interests and are auctioning them off to the highest bidder. If these are bought---no title work is done (saving thousands of dollars for the winning bid) plus the royalties are set lower (1/8th or 1/6th) which means that the winnig bidder gets to keep a good chunk of the royalties as well. Instead of running title, spending money on running tract indexes, spending money on hiring a landman to do this, then finally finding someone who owns what? 10 acres? Leasing them while retaining little to no royalty percentage? This is what makes the land worth $2,000 per acre. It saves companies a lot of time and hard work because the work is already done for them. That is why they pay more, but in reality, it is not paying a whole lot more than what they would be paying to procure all the necessary documents for each individual mineral interest owner.
They are 2 different scenarios---the state is selling land that doesn't need to be cured and has no title work...private mineral interest owners want higher royalties, shorter leases, and they have sometimes have extremely messy titles that need to be cleaned up. Apples and Oranges.
Thank you for the information. But I do know that they have drilled part of my mineral rights area in the past and their is still oil and interest in drilling there again. What I dont know is who to contact to find out how much oil is on all the area of which I have the mineral rights and what is the closest rig to my area that is drilling right now. Any information would be appreciated. Thank you
r w kennedy said:
Ms. Walker, I can see your area doesn't have alot of production history. There is production all around the outside of your TWP and Range. You may have better luck if you are in a border section, as the only producing well I saw closer to the center was a Bakken well that may never pay for itself ( less than 25,000 bbl in over 4 years ). All hope is not lost, the technology is better than that of 4 years ago and they have surely seen more in it than my quick glance. I wouldn't take anyones word for how much oil there is or isn't there. They do still drill dry holes, so even the experts can't be 100% trusted. I don't know what the going rates are around your property. I would solicit offers from several co's, to get the best offer. If you have had a few leases with one co, and have a good relationship with them, I would allow them the opportunity to match the best offer. I appreciate a good working relationship, but that is no reason to accept a lower offer than you might get elsewhere. This is business and you have the right and responsibility to get the most you can for your property for yourself and your family. You might check to see if your county has a discussion group on this forum. Sorry that I cannot recommend a landman in N.D. I know of 8 or so, only 1 of whom I would use, and I wouldn't trust him. Maybe someone else will recommend one. I would certainly check his qualifications and ask for references from other land owners. Now is a good time for your lease to be open again. I wish you luck and a good lease.
Ms. Walker, when last I looked, I was looking generally at the entire range and township because you didn’t supply a section number. I also stated how the one well nearest the center was doing production wise. I think what might be more instructive would be for you to look at the NDIC Oil and Gas Division site and the GIS server map. Go to the site and select the GIS server map from the column on the left. Select find section from the column on the left. Enter your township, range and section at the bottom and click zoom to section. Any rigs within miles of your property will be plainly evident on the map. you can set the map filter to show a larger area or click and drag the map with your mouse. Like many others I believe that drilling rigs are moving according to where the leases are running out because they really do not want to have to lease again the acres they leased 3 to 5 years ago. The royalty rates will probably be higher now and I wouldn’t be surprised if it cost them over 1 million dollars or more to lease all the acres in a 1280 spacing. I would certainly avoid having to lease the acres again if I were in their place. Just because a rig in is your vicinity doesn’t mean you are next to be drilled. The final question of how much oil is down there in your acres is unanswerable to any accurate degree. I hope the GIS map gives you a better view of things.
Thank you for answering and for the information but I dont understand what you mean when you say that drilling rigs are moving to where leases are running out and why they would not want to lease land they have been leasing , if they have not drilled there yet?
r w kennedy said:
Ms. Walker, when last I looked, I was looking generally at the entire range and township because you didn't supply a section number. I also stated how the one well nearest the center was doing production wise. I think what might be more instructive would be for you to look at the NDIC Oil and Gas Division site and the GIS server map. Go to the site and select the GIS server map from the column on the left. Select find section from the column on the left. Enter your township, range and section at the bottom and click zoom to section. Any rigs within miles of your property will be plainly evident on the map. you can set the map filter to show a larger area or click and drag the map with your mouse. Like many others I believe that drilling rigs are moving according to where the leases are running out because they really do not want to have to lease again the acres they leased 3 to 5 years ago. The royalty rates will probably be higher now and I wouldn't be surprised if it cost them over 1 million dollars or more to lease all the acres in a 1280 spacing. I would certainly avoid having to lease the acres again if I were in their place. Just because a rig in is your vicinity doesn't mean you are next to be drilled. The final question of how much oil is down there in your acres is unanswerable to any accurate degree. I hope the GIS map gives you a better view of things.
Ms. Walker, If they can drill the lands where the leases are about to run out they will be held by production and they will not have to lease them again. The primary term of an oil and gas lease is the delay negotiated before they must drill a well to obtain production. After production is achieved, they need not pay bonus and rentals, they then pay the royalty fixed in the terms of the lease, (which we all hope is more than the delay rentals). When I said they really don’t want to [ have to ] lease the property again, I was referring to the fact that, if they can get a well started that will produce oil or gas, the acres under it will be [ held by production ] HBP, and they will not have to pay a bonus/delay rentals, and usually the royalty is fixed. IE, if your acres were leased for $100 per acre and 1/6th [ 16.67% or thereabouts ] 4 years ago, it would be desirable to the operator to drill a well and hold by production, instead of negotiating a new lease for possibly $750 per acre and 1/5 [ 20% ] royalty. I am sorry if I confused you, I was not saying they no longer want the acres. I was saying they are trying to avoid the cost of paying for the same acres twice if they can. I hope this makes things clear.
@esther. For whatever it is worth, there are 6 public land lease parcels in (141N98W) going to bid at the May 4th auction.
Hi Andy: ok so now I have been offered 600.00 per acre for my lad lease parcels and 1/6 . Do you think this is a fair price at this time or will I be better off at auction? please respond ASAP thank you
AndyB said:
@esther. For whatever it is worth, there are 6 public land lease parcels in (141N98W) going to bid at the May 4th auction.
Private lease parcels dont go on auction. However the next public auction is next week. You can go to thesame web site to look it up. Those are 5yr leases. Use it for comparison
Ms. Walker, I hope you are dealing with more than 1 operater / lease agent. Frequently you can get i party’s offer up to $600 per acre and the next lessee may top it by $100 and 1% to 2% royalty or more just for asking. Landman / lease agents have little incentive to raise their offer if they think they are the only one you are dealing with. I hope you have offers from more than 1 party. Good luck