I own the rights to 80 acres in Weld County, Colorado: T7N 60W of the 6th PM
I have received a first offer of $200/acre bonus
5 yr term - paid up
1/6 Royalty
Any thoughts would be welcomed as to competitive nature of this offer? Should I negotiate further price and/or terms?
Thanks
investigate other developers and production company's in your area.
weld county is very busy with minerals this year.
Hi Stephen,
Was it for Chesapeake or who was the lease offer for? It's not what others are getting offered and not very good at all with respect to any of the terms.
The offer was from Joint Resources, Ft Worth, TX. I am questioning this offer because I saw a recent thread (for a diagonally adjacent section) from Tom on the forum as follows:
I researching a Oil and gas lease term sheet in
Weld County T6N R61 W of the 6th P.M
I am being offered $500/arce bonus
7 yr term - paid up
1/6 Royalty
This is less then Mr. Mullins, however I do not
have any more information on the property.
I am looking for some advice or a reference to a
real estate/mineral rights attorney in We
Tom on December 8, 2010 at 1:28pmThoughts?
Mineral Joe said:
Hi Stephen,
Was it for Chesapeake or who was the lease offer for? It's not what others are getting offered and not very good at all with respect to any of the terms.
They are a legit company that do their own drilling but still it’s not a very good offer. With a starting offer like that I doubt you’ll be able to negotiate very good terms with them but it won’t hurt to try.
Stephen -
It seems kind of low...I've been researching on this site and county lease sales and it seems like the range has been $300 - $1,100 and more like 3 year terms with up to 1/5th royalty.
Hope this helps.
Dan M
I want to lease mine to Dan.
We are offering $300-$500 net mineral acre with 1/6 gross royalty in Weld County Mike Callahan 307 Resources 307 532 0576
Mike, for how many years is this on your leases?
5 years with an option to renew for 2 years at athe same rate as the initial term Thanks Mike
Mineral Joe said:
Mike, for how many years is this on your leases?
I am a little confused. I own 80 acres with half of the mineral rights, my landman just offered 400/acre signung bonus with 1/5 royalties. But now he is talking about net mineral acres. i was under the assumption it was gross untill at the last minute he threw that in cutting what I am getting in half. So this is telling me my surface acres are not worth anything. So if i take the deal then I will not let them step on to my property since they have not leased that. Just like the counter part of my mineral rights are getting the same amount that i will be getting but do not own the property. Any comments. I farm this land and make a living on it so if they screw it up, no amount of money will make up for that.
Alan -
We were confused by this also...I am no expert, but here is how it was explained to us...
We have a 25% share of 80 acres (NW/4) and a 12.5% share of 80 acres (NE/4) - so our net acres are 80*.25 + 80*.125 or 20 + 10 or 30 net acres.
We only have the mineral rights. We were under the impression there was separate agreements they'd have to make with the current land owner, even if they no longer owned the mineral rights of their own land, they be getting something, but I am not sure if it is a bonus amount or just a % royalty amount.
Maybe someone could add to this.
Dan M
Has anyone heard of Diamond Resources? I have minerals in Weld County (1N64W) and they have offered to lease 100% of the surface acres with guarantee to drill in 24 months. What is the going rate for bonus and royalty? Thanks for your help.
When my dad did this 20 years ago they gave him $75 an acre and didn’t mention anything about mineral acre rights. When I started this negotiation it was for my land and rights, not the mineral rights of others. I just want to know how everyone else is getting paid by, just thier mineral rights or are land owners getting just as much??
The bonus amount is low. Our company is offering $350 per net mineral acre with a 1/6 gross royalty for a 5 year lease Mike Callahan 307 Resources 307 532 0576
Surface acres and net mineral acres are two different legal entities. A net mineral acre is the percentage of the minerals you own i.e You own 100 acres with a 50% interest in the minerals= 50 net mineral acres Mike Callahan 307 Resources 307 532 0576
Dan Montez said:
Alan -
We were confused by this also...I am no expert, but here is how it was explained to us...
We have a 25% share of 80 acres (NW/4) and a 12.5% share of 80 acres (NE/4) - so our net acres are 80*.25 + 80*.125 or 20 + 10 or 30 net acres.
We only have the mineral rights. We were under the impression there was separate agreements they'd have to make with the current land owner, even if they no longer owned the mineral rights of their own land, they be getting something, but I am not sure if it is a bonus amount or just a % royalty amount.
Maybe someone could add to this.
Dan M
MIke Callahan said:
The bonus amount is low. Our company is offering $350 per net mineral acre with a 1/6 gross royalty for a 5 year lease Mike Callahan 307 Resources 307 532 0576
So what are you offering the land owner?? That is what I am trying to find out because if you are just buying mineral rights then how are you going to drill a well?? So if I lease just my net mineral rights then I am not leaseing any of my surface rights at the price you are saying you are paying ($350 per net mineral acre)
In Colorado at least, the surface owner cannot keep someone from coming in and accessing their minerals. Technically they don’t even have to pay for the land they use. I think in practice that the oil companies do that however. There are statutes in place that force the oil company to act in a reasonable fashion at least. So, the bottom line is that is sucks for someone to only own the surface rights. If you own both as you do, force the oil company into doing a surface use agreement with you at the time of signing the lease. In the lease itself you can even negotiate “no surface use.” That means they can’t come onto your property at all. If you don’t have that in there, they can come on your property. No permission required by you, nor offer of compensation.
alan mazzotti said:
So what are you offering the land owner?? That is what I am trying to find out because if you are just buying mineral rights then how are you going to drill a well?? So if I lease just my net mineral rights then I am not leaseing any of my surface rights at the price you are saying you are paying ($350 per net mineral acre)