I am interested in getting information about oil leases in Banner County, Nebraska, so that I can negotiate a fair lease for our property in this area. Can anyone tell me what general leasing terms are being offered (bonus, royalty percentage, etc.) and what companies are currently actively seeking leases?
It is likely you have been approached by a company looking to lease for the Niobrara Shale. Use the search bar and you’ll find more discussions about the play. Here is a good one about Weld County, Colorado.
http://www.mineralrightsforum.com/forum/topics/weld-county-colorado-offers
Leases have been exchanged for over $3,000 in the hottest areas. I don’t think Nebraska is considered core for the play. EOG leased 400,000 acres at a cost of $35/acre in CO and WY, but that was before wells were drilled. Leases are now up in the several hundred dollars/acre.
I’d don’t know about royalty rates in NE, but a lot of leases have been signed with 12.5% royalty, but I think you should try to get 3/16 to 1/5 royalty…
Good luck!
In the last week, I have been offered $200/A and $300/A by two separate entities trying to lease my mineral rights in Kimball County. I also had someone call attempting to buy my rights for a fairly high figure. This area of Kimball County (central) seems to have quite a little interest now and it is possible the interest may continue to move up to Banner County. I’m not sure I can give you any input as to what would be a good rate but I will tell you that it may pay to wait for offers to increase.
Thank you, Reagan and Billy, for your responses. I thought I would be able to respond to your info earlier, but have been waiting to hear from STA Resources about the addendum I asked to have added to amend their lease. Originally, I was offered a 5-year primary lease of $25/acre, with an optional 5-year extention at $37.50/acre. They are currently countering with a 5-year primary lease, without an extension option, with an up-front bonus of $40/acre, which is better than the original offer, but I’m not sure it is enough.
Because they are not offering to lease all of my land, I have asked to have the Mother Hubbard clause stricken from the lease, as the land that is not included in their lease is contiguous and I do not want to have it encumbered by their lease. They, of course, want to leave that clause in. We’ll have to continue negotiations on that.
In my addendum, I included a clause that stated that Lessor would not be required to pay any costs for transportation, processing, or marketing from royalties. The oil company countered that the phrase “unless these costs enhance the royalties”. Sounds like a way to circumvent the no-cost clause by allowing all costs, since they could allege that all of those costs enhance royalty income. Any suggestions?
Finally, I would appreciate Pugh clause language that has been accepted, both continuous and vertical. I have added both to my addendum, but looks like they don’t like the language I offered. Here’s the wording I offered: “Lessor’s written consent is required to pool or unitize. Lessor agrees to voluntary pooling only to the extent necessary to get a drilling permit from the state. The maximum acreage that may be contained in a pool may not exceed 40 acres. All pooling is required to occur prior to the commencement of drilling operations. Upon the pooling of less than all of the leased land, this lease shall be severed and considered as separate and distinct leases. The lease term and all the rights and obligations of the lessee under this instrument shall apply separately to the pooled and unpooled acreage. All lands outside the producing unit will be released after exploration of (this) primary lease. In addition, all formations below the total depth of the well and 100 feet above the uppermost perforation will be released after expiration of the primary term of the lease.” Suggestions?
I really appreciate all your input. This forum is very, very helpful for a novice such as I am. Colleen
Thanks, Reagan, for your response. I messed up—I responded to you by responding to myself by mistake. I decided to send you this message so that you could look up my response in the forum under my original discussion topic. I’m a newbie, so bear with me. Again, I appreciate your input. Colleen
Reagan Thompson said:
It is likely you have been approached by a company looking to lease for the Niobrara Shale. Use the search bar and you’ll find more discussions about the play. Here is a good one about Weld County, Colorado.
http://www.mineralrightsforum.com/forum/topics/weld-county-colorado…
Leases have been exchanged for over $3,000 in the hottest areas. I don’t think Nebraska is considered core for the play. EOG leased 400,000 acres at a cost of $35/acre in CO and WY, but that was before wells were drilled. Leases are now up in the several hundred dollars/acre.
I’d don’t know about royalty rates in NE, but a lot of leases have been signed with 12.5% royalty, but I think you should try to get 3/16 to 1/5 royalty…
Good luck!
Billy, I apologize for not replying to you correctly—I ended up responding to myself! Bear with me—I’ll get it right next time. I just want to refer you to go to my original discussion question so you can see what I wrote. I really appreciate your input—it was very helpful. So far you are the only Nebraskan I have heard from. Thanks again, Colleen
Billy said:
In the last week, I have been offered $200/A and $300/A by two separate entities trying to lease my mineral rights in Kimball County. I also had someone call attempting to buy my rights for a fairly high figure. This area of Kimball County (central) seems to have quite a little interest now and it is possible the interest may continue to move up to Banner County. I’m not sure I can give you any input as to what would be a good rate but I will tell you that it may pay to wait for offers to increase.
My gut Colleen, is that $50 is very very low. As others said, Weld County was leasing out at about that rate, prior to Jake being drilled. The rates are now up to $2700. I’m on the southern edge of the Niobrara in Colorado, and we just completed our deal for $1000 per acre. So, let’s say you’re on the far eastern edge, I personally would think you should be closer to $1000 vs. $50. Do you have a lot of land? If you’ve got a large amount, the price should reflect that. If you read the Weld County post in full, at one time I told the experiences our next door neighbors had. Their first offer was for $20. Our $1000 deal came from the same company. The neighbors eventually got theirs up to $175–they only had one company trying to lease from them. Is this the first company that has approached you? If so, you may want to consider soliciting some bids of your own. You will never get the best deal if you only having one company in the game.
Colleen Acker said:
Thank you, Reagan and Billy, for your responses. I thought I would be able to respond to your info earlier, but have been waiting to hear from STA Resources about the addendum I asked to have added to amend their lease. Originally, I was offered a 5-year primary lease of $25/acre, with an optional 5-year extention at $37.50/acre. They are currently countering with a 5-year primary lease, without an extension option, with an up-front bonus of $40/acre, which is better than the original offer, but I’m not sure it is enough.
Because they are not offering to lease all of my land, I have asked to have the Mother Hubbard clause stricken from the lease, as the land that is not included in their lease is contiguous and I do not want to have it encumbered by their lease. They, of course, want to leave that clause in. We’ll have to continue negotiations on that.
In my addendum, I included a clause that stated that Lessor would not be required to pay any costs for transportation, processing, or marketing from royalties. The oil company countered that the phrase “unless these costs enhance the royalties”. Sounds like a way to circumvent the no-cost clause by allowing all costs, since they could allege that all of those costs enhance royalty income. Any suggestions?
Finally, I would appreciate Pugh clause language that has been accepted, both continuous and vertical. I have added both to my addendum, but looks like they don’t like the language I offered. Here’s the wording I offered:
“Lessor’s written consent is required to pool or unitize. Lessor agrees to voluntary pooling only to the extent necessary to get a drilling permit from the state. The maximum acreage that may be contained in a pool may not exceed 40 acres. All pooling is required to occur prior to the commencement of drilling operations. Upon the pooling of less than all of the leased land, this lease shall be severed and considered as separate and distinct leases. The lease term and all the rights and obligations of the lessee under this instrument shall apply separately to the pooled and unpooled acreage. All lands outside the producing unit will be released after exploration of (this) primary lease. In addition, all formations below the total depth of the well and 100 feet above the uppermost perforation will be released after expiration of the primary term of the lease.” Suggestions?
I really appreciate all your input. This forum is very, very helpful for a novice such as I am.
Colleen
Lisa, this is the first company that has approached us for leasing. I’m not sure how to go about contacting other companies. Any suggestions? I have in the neighborhood of 1000 acres, which is not a huge holding, but may give me some leverage in getting a higher bid. I’d love to get the offer you received! As far as I know, no property in my area is commanding figures anywhere near that amount. I am finding that landowners here are very private about their negotiatied leases, so I haven’t been able to get much local input. I recently inherited my Banner County land and live out of the state, so that may be the reason I’m not finding people willing to discuss this with me. I appreciate your information. Colleen
Lisa said:
My gut Colleen, is that $50 is very very low. As others said, Weld County was leasing out at about that rate, prior to Jake being drilled. The rates are now up to $2700. I’m on the southern edge of the Niobrara in Colorado, and we just completed our deal for $1000 per acre. So, let’s say you’re on the far eastern edge, I personally would think you should be closer to $1000 vs. $50. Do you have a lot of land? If you’ve got a large amount, the price should reflect that. If you read the Weld County post in full, at one time I told the experiences our next door neighbors had. Their first offer was for $20. Our $1000 deal came from the same company. The neighbors eventually got theirs up to $175–they only had one company trying to lease from them. Is this the first company that has approached you? If so, you may want to consider soliciting some bids of your own. You will never get the best deal if you only having one company in the game.
Colleen Acker said:Thank you, Reagan and Billy, for your responses. I thought I would be able to respond to your info earlier, but have been waiting to hear from STA Resources about the addendum I asked to have added to amend their lease. Originally, I was offered a 5-year primary lease of $25/acre, with an optional 5-year extention at $37.50/acre. They are currently countering with a 5-year primary lease, without an extension option, with an up-front bonus of $40/acre, which is better than the original offer, but I’m not sure it is enough.
Because they are not offering to lease all of my land, I have asked to have the Mother Hubbard clause stricken from the lease, as the land that is not included in their lease is contiguous and I do not want to have it encumbered by their lease. They, of course, want to leave that clause in. We’ll have to continue negotiations on that.
In my addendum, I included a clause that stated that Lessor would not be required to pay any costs for transportation, processing, or marketing from royalties. The oil company countered that the phrase “unless these costs enhance the royalties”. Sounds like a way to circumvent the no-cost clause by allowing all costs, since they could allege that all of those costs enhance royalty income. Any suggestions?
Finally, I would appreciate Pugh clause language that has been accepted, both continuous and vertical. I have added both to my addendum, but looks like they don’t like the language I offered. Here’s the wording I offered:
“Lessor’s written consent is required to pool or unitize. Lessor agrees to voluntary pooling only to the extent necessary to get a drilling permit from the state. The maximum acreage that may be contained in a pool may not exceed 40 acres. All pooling is required to occur prior to the commencement of drilling operations. Upon the pooling of less than all of the leased land, this lease shall be severed and considered as separate and distinct leases. The lease term and all the rights and obligations of the lessee under this instrument shall apply separately to the pooled and unpooled acreage. All lands outside the producing unit will be released after exploration of (this) primary lease. In addition, all formations below the total depth of the well and 100 feet above the uppermost perforation will be released after expiration of the primary term of the lease.” Suggestions?
I really appreciate all your input. This forum is very, very helpful for a novice such as I am.
Colleen
I’d say 1000 acres is a lot! One easy suggestion would be to hire an independent landman. We hired one for our neighborhood, so we could negotiate as an entire section. I can give you his name if you’d like. Otherwise, check out the Nebraska Oil and Gas Conservation Commission. You should be able to find all the wells and permits that have been issued in that area. Then, you contact the operators of those wells to find out if they’d be interested in leasing your rights. They may send you to the broker who is obtaining leases on their behalf. If Banner County’s Clerk and Recorder has their documents available online, you can see the recorded leases for your area. They won’t show the bonus payment, but it will show everything else, and you’ll know who has been obtaining the leases. However, I’d venture to guess they aren’t quite caught up to the year 2010. Unfortunately, I think the activity in Nebraska hasn’t been as wild as it has been in Colorado and Wyoming, so there’s probably less info to glean from. Because of that, you might also check out information in Wyoming, if you’re close to the border.
Thanks for your tips, Lisa. I’ll look into the Oil and Gas Conservation Commission. Unfortunately, you’re right about about Nebraska being a bit slow in providing online access to records. I plan to spend a few weeks there in Sept. and Oct. and will do some checking for info at the courthouse. If I don’t get any solid leads, I will contact you again to get the name of the independent landman who helped you. This has been a very interesting and unexpected bit of research for me and I am enjoying every minute of it. Best, Colleen
Lisa said:
I’d say 1000 acres is a lot! One easy suggestion would be to hire an independent landman. We hired one for our neighborhood, so we could negotiate as an entire section. I can give you his name if you’d like. Otherwise, check out the Nebraska Oil and Gas Conservation Commission. You should be able to find all the wells and permits that have been issued in that area. Then, you contact the operators of those wells to find out if they’d be interested in leasing your rights. They may send you to the broker who is obtaining leases on their behalf. If Banner County’s Clerk and Recorder has their documents available online, you can see the recorded leases for your area. They won’t show the bonus payment, but it will show everything else, and you’ll know who has been obtaining the leases. However, I’d venture to guess they aren’t quite caught up to the year 2010. Unfortunately, I think the activity in Nebraska hasn’t been as wild as it has been in Colorado and Wyoming, so there’s probably less info to glean from. Because of that, you might also check out information in Wyoming, if you’re close to the border.
Billy,
What did you finally get (terms) for your acreage?
Thanks, J.
Billy said:
In the last week, I have been offered $200/A and $300/A by two separate entities trying to lease my mineral rights in Kimball County. I also had someone call attempting to buy my rights for a fairly high figure. This area of Kimball County (central) seems to have quite a little interest now and it is possible the interest may continue to move up to Banner County. I’m not sure I can give you any input as to what would be a good rate but I will tell you that it may pay to wait for offers to increase.
$250/A and 16% royalty. I can’t disclose the company but if you check the courthouse records they have leased quite a few acres in W & SC Kimball County.
Billy
Jason Dvorin said:
Billy,
What did you finally get (terms) for your acreage?
Thanks,
J.
Billy said:In the last week, I have been offered $200/A and $300/A by two separate entities trying to lease my mineral rights in Kimball County. I also had someone call attempting to buy my rights for a fairly high figure. This area of Kimball County (central) seems to have quite a little interest now and it is possible the interest may continue to move up to Banner County. I’m not sure I can give you any input as to what would be a good rate but I will tell you that it may pay to wait for offers to increase.
My sister and I have signed leases to our inherited mineral rights in Banner Co. We did so a few months ago and now I’m hoping they drill soon. The other 2 families of the inheritance haven’t signed yet as they are holding out for more moneyl I am just hoping that they drill soon and then to me that is the time to wait for a really good price.
Is there any drilling activity going on in Banner County or the surrounding area at this time? I haven’t been to the panhandle in several months.
Billy
Colleen,
Did you end up leasing your 1000 acres in Banner County? If so do you mind telling me what you were paid per acre. I live in Texas and dabble in oil and gas here. I have a family friend who has some land in Banner county and they were wondering what acreage is leasing for?
Thanks.
Colleen Acker said:
Thanks for your tips, Lisa. I'll look into the Oil and Gas Conservation Commission. Unfortunately, you're right about about Nebraska being a bit slow in providing online access to records. I plan to spend a few weeks there in Sept. and Oct. and will do some checking for info at the courthouse. If I don't get any solid leads, I will contact you again to get the name of the independent landman who helped you. This has been a very interesting and unexpected bit of research for me and I am enjoying every minute of it. Best, Colleen
Lisa said:I'd say 1000 acres is a lot! One easy suggestion would be to hire an independent landman. We hired one for our neighborhood, so we could negotiate as an entire section. I can give you his name if you'd like. Otherwise, check out the Nebraska Oil and Gas Conservation Commission. You should be able to find all the wells and permits that have been issued in that area. Then, you contact the operators of those wells to find out if they'd be interested in leasing your rights. They may send you to the broker who is obtaining leases on their behalf. If Banner County's Clerk and Recorder has their documents available online, you can see the recorded leases for your area. They won't show the bonus payment, but it will show everything else, and you'll know who has been obtaining the leases. However, I'd venture to guess they aren't quite caught up to the year 2010. Unfortunately, I think the activity in Nebraska hasn't been as wild as it has been in Colorado and Wyoming, so there's probably less info to glean from. Because of that, you might also check out information in Wyoming, if you're close to the border.