Newbie needs help w Mineral Rights Offer - Arapahoe County CO Weld County

Reading this forum has been very helpful.

I was recently made aware of some mineral rights that I inherited. The rights are in Township 5 South, Range 63 West and Township 5 South, Range 64 West. Both in Arapahoe county, Colorado.

Someone working with GFL has contacted me to offer a lease. The offer is $25 an acre, 12.5% royalty for 5 years. As I understand it, the $25 and acre is a one time payment for the entire lease (not a monthly payment).

The lot is 1920 acres in size.

I've read the discussion of Jake and some of the high values in Weld County. I've also read about teh WY auction that fetched some good prices. What I don't know is if Arapahoe county is far enough from Jake et al that it isn't worth as much.

I also learned that I have a small share (5.5%) of a larger "land trust". I'm not sure if that handcuffs me in regard to negotiating a different lease agreement than the others in the land trust.

Any comments as to my offer and situation would be appreciated.

thanks in advance


Mike- I work in Weld County where mineral owners are fetching a very high price for their bonus, but I’m unfamiliar with the per acre price in your area. Talk to other mineral owners in your area. The main concern is to protect your right via a "Continuous Drilling Clause” and a vertical and horizontal “Pugh Clause” which can be included in the lease. The Continuous Drilling Clause forces the oil and gas company to continuously drill until all minerals have been developed, while the Pugh clause forces the oil and gas company to release all undeveloped minerals at the end of the primary term of the lease. This will get you started during your negotiations. Let me know how it turns out and if you have any more questions. Steve M.

The landman is trying to take horrible advantage of you. In our area, Montague County - bonus payments for leasing are $600 and up. DO NOT SIGN ANYTHING WITHOUT CONSULTING A RELIABLE OIL AND GAS ATTORNEY. If $600 an acre in your area is normal your signing bonus could be worth over $1,000,000.00 (that’s right over a million dollars) - also reasonable royalty expectations are 25% - you will probably be forced to pool - but that’s not shabby either. Of course all this could vary depending on what county you are in. SEE AN ATTORNEY!

Mike- Without revealing too much information as we continue to negotiate our current offer is north of $1,000/net mineral acre. If your acreage is contiguous it may in fact be worth more. $25/acre is a bargain offer. Good Luck!


I work with Upstream Innovations and would be interested in talking with you in regards to your interest in Arapahoe County, CO. Please let me know what is the best way to contact you and what would be a good time for use to discuss this matter.


I have 13 acres in Arapahoe County (though I live in Colorado Springs). The total acreage in the block is 160 acres, however my portion is net 13 acres, however, I only own the oil & gas rights, not the surface land. I have full title to these oil & gas rights. I received an unsolicited lease offer from a George Rife, Landman from Mason Dixon, however, they were trying to low-ball me. I suggested some different terms and some modifications to the lease and they said they were not interested in my changes. Thus, the negotiations were terminated. If you are interested (and fair-minded) then I will be willing to provide you the detailed location. It is located in Township 4 South, Range 60 West, 6th Principal Meridian.

P.S. I realize that your comments were back in Oct 2010. You can also Email me at Floyd


I know it's been a year since your first chat but I would like to know how it turned out for you. I

have minerals in Kiowa Co. Colorado with a few landmen knocking on our door. Your mineral

interest if probably in a "hotter" area however I would still like to know how you did on your

leasing if you don't mind sharing that info.


Kiowa Co. mineral owner

I don’t have any new information. Like you, they started out with me at
$25 per acre. I took their lease and using the Internet, revamped quite a few items.
I asked for $200 per acre signing bonus and the price per barrel would be what the
operator/owner received and I would not be responsible for any of the production costs.
I also requested 15% of the oil that came out. They wanted a 5 year and a 3 year option
and I tried to get them to 4 and 4. They thought I was trying to rob them. They said no
and that is the way it stands as of now. I believe I will just leave the
acreage as it is unti God tells me what to do. I am a Christian, Pentecostal
and a firm believer that before I do anything, I pray and ask the Lord Jesus
through the Holy Spirit what He would have me do. I did this when I purchased a
home in Monument Colorado in 1999. The owner wouldn't even take my offer. So,
I left and was preparing to leave back to Florida (where I currently lived) and
was visiting my daughter in Aurora when I received a call from my Son-In-Law
saying some man wanted me to call him. The man was the owner of the house. He
belligerently asked if I was a Real Estate man. To make it short, he accepted
the offer that the Lord told me to make.
Hopefully, because I am up in age, I will receive a new offer in the next
year or so that will be favorable to all parties.

You would do better if you used an attorney you should get somewhere between $600-$1,000 per acre and at least 25% royalty - you should get a two year lease with a renewal option that favors you and not the landman/oil company - they are taking gross advantage of you - you also need to receive reimbursement for land damages, water usage, water damages, livestock, gates, fences and a whole lot more - they did you a favor by refusing your offer. An attorney is worth every dime you pay him - you will make a lot more than you pay him - that is for sure - also, Mr. Cotton can advise you and does so for a very reasonable fee - some of the advice he gives is of no charge.