I have received an offer of 3/16 royalty for my interest in Sec 27 and 34 T6N R61W. I was thinking to request 1/5, does that sound reasonable in this area.
I see other leases by Civitas in Section 27 for 3/16 royalty and between 3/16 and 1/5 royalty rates (one with no post production cost language) with Bonanza Creek in Section 34 this year. So, it seems like 1/5th royalty is in the ballpark.
In most cases you can get higher than the initial royalty rate being offered, sometimes at a lower lease bonus amount. In any case, I would try to negotiate no post-production cost language (except your proportionate share of ad valorem, production, and excise taxes).
Good luck! Thanks, Matt Sands
Mr. Sands
Thank you for the information. Love your podcast. Listen daily.
You’re welcome. I’m glad you’ve been enjoying the show! Matt
Matt, your podcast is very helpful. Do you do any Youtube instructional videos that could be subscribed to re: checking formulas on DO? Also, we received an offer from an operator to lease minerals which we reviewed and executed. I received by mail another lease offer from a different operator for the same area? Is this possible and if so, how? We can’t sign this lease though it actually had a higher royalty rate because we have already executed the other, but wanted to understand how this is possible. Thanks!
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