My family owns the mineral rights to 325 acres about 10 miles notheast of Craig. We have been offered $135 per acre, 5 year lease, 15% royalty.
I have several questions that I hope someone can help with:
1) Is this a fair price?
2) Why all the activity in the area now? We haven't had a lease for about 15 years, and now it looks like there are several companies competing with each other.
3) Is there any drilling or producing wells already in the area?
4) What is a "unit". The leasing company keeps referring to a "unit", and that we have 1/2 of a unit. They talk about drilling 1 well per unit.
5) What would a typical well produce in barrels per day, and what would generally be used as the pricing mechanism (Texas Crude)?
My family has a lot of questions on the leases, but we will probably have a lawyer look them over.
Any advise, suggestions, or information you can give me would be appreciated.