Iwas approached by Mason Dixon Energy thru their Landman George Rife. I know that the people who are going to work the lease is another company. When I made some changes on a "copy" of the lease the Landman wasn't pleased at all. I wanted $200 bonus per acre for the first 3 years and also $200 an acre for Phase II, the second two years of the lease. They wanted me to sign for 5 years and then a second for 3 years. They offered 14% Royalty and I wanted 15% Royalty and the price was to be at Point of Sale and I was not to pay any of the expenses.
The Landman said they wouldn't meet that and said that negotations are finished. I thanked him and left it at that.
Now, how does a person go about soliciting offers for mineral rights? Anyone have any suggestions? I certainly could use some advice. I used this site and another oil & gas lease site that talked about the do's and don'ts, plus advice on negotiating the lease.
I know that I have rambled on but, I guess that happens when you get older.
Floyd,
The mineral rights you own are yours to do with as you please within the law.
I deal with multiple operators and land companies on most of the minerals I manage striking deals that are good for both parties. It takes some understanding of both sides to positively conclude a negotiation. Mason Dixon has been around a long time and worked in many areas for many clients. I predict that they will be back to you now that they know what you want and can match it up with a compromise offer their client can accept. With the activity in our area, this may take some time and it may not be Mr Rife who comes back to you. Without knowing anything about the geologic potential of your land, I find your demands on the high side of a reasonable range for land that is large enough to effect a drilling unit selection but not near established production or permitted exploration wells.
If you are patient and watch for permitting of wells, especially in the Niobrara, and completions nearing your land, you will learn what companies to approach with a solicitation for a lease. When the demand for your acreage increases, and I suspect it will, you will be in a good position knowing exactly what you want in terms of both bonus and lease conditions.
Hi Gary, what are the legal descriptions of your land?
This is for M.A. Miller. Was your question: What are the legal descriptions of your land? addressed to Gary meant for me? Pls let me know and I will provide you the info.
Floyd,
There are many factors that an Oil Company or Broker will take into consideration when looking to acquire a lease for your mineral rights. Production potential is one of the main factors, size of mineral acres, location and is the minerals that you own going to allow them the majority in a specific area giving them what they need to allow permits to be pulled. Price may be reasonable, low or high depending on these factors as well as others.
Typically the time of the lease may also dictate the upfront bonus that is paid per acre. If they are willing to meet your demands and pay more for your request, than it is usually fair to allow them a longer term on the lease if and when you have agreed to a fair percentage on the procuction side of things.
There are ways to research and solicit other companies to lease your minerals. That can be done by some research or hiring a landman to research these things for your behalf.
Issiah, thanks for the info. It should prove worthy when next I am approached re: my mineral rights. I do have a question though: Would you elaborate on the “ways to research and solicit other companies to lease your minerals”. Would certainly appreciate it! Thanks, Floyd
your welcom on the info Floyd.
You can do title or leasing research to find out what other Companies are working in your area. Talking to neighbors and seeing if they are currently leased from other competitors is also helpful. There are companies and people that will even do that for you and verify what is a good fair market value of not only your price per acre, but also what are good royalties percentages for that area. These companies can be reasonable and are usually worth the investment considering you are protecting your investement.
Sometimes your local county may have some helpful information and be able to give you some insight on who or what is going on. It all depends on how active you want to be on this.
yes, that question was for Floyd. Depending on what part of Arapahoe county you are in, there could be a considerable difference in your lease terms.
floyd holmes said:
This is for M.A. Miller. Was your question: What are the legal descriptions of your land? addressed to Gary meant for me? Pls let me know and I will provide you the info.
The legal description of the land is: Township 4 South; Range 60 West; 6th Principal Meridian, Section 22: SW1/4SE1/4, E1/2SE1/4, SE1/4NE1/4. I took this from the Deed. Floyd
M A Miller said:
yes, that question was for Floyd. Depending on what part of Arapahoe county you are in, there could be a considerable difference in your lease terms.
floyd holmes said:
This is for M.A. Miller. Was your question: What are the legal descriptions of your land? addressed to Gary meant for me? Pls let me know and I will provide you the info.