Can someone tell me if this is a competitive offer for an oil/gas lease in Montrail County at this time: 5-year contract, $250/acre (I have 60 acres), 18.75% royalties. Thank you!
Ms. Huffman, it would depend on where in Mountrail, Township, Range and Section, that your minerals are. People in eastern Mountrail would be singing hosannas, people in western Mountrail would be saying Oh heck no!
Thanks for your response. Township 158 North, Range 93, Sections 13 and 23.
Ms. Huffman, I believe that the offer is on the low side. Oasis has drilled several successful wells 1-2 miles from you. I think your offer to lease is being made by a bargain shopper. The price of oil is down but it has always recovered in the past and gone down once again. I think they would like to lease everyone at the low point of the cycle. I don't think they will move much on the royalty but I would tell them that the lease of my acres was worth more than $250. Wapiti Operating appears to have the spacing your section 13 would be in and they have a permit for a well. Permits don't mean a whole lot, they cost $100 and they regularly expire with no activity. I had never heard of Wapiti before this, I don't think that is a good sign. If you are truly interested in leasing, I might shop the lease around. Wapiti is interested, but at a price I believe they could re-sell your lease at a profit. Oasis may well be interested in your lease. It is always a good idea to keep lease terms short but in your situation I would stick firmly with a 3 year term. I hope this helps.
I should have mentioned in the first place: It is OASIS making the offer.