Per acre rates, royalty percentages, townships

Hi Darrell,

I saw your earlier post about your family being approached by Meany.

My family has some mineral rights holdings southwest of Newcastle, WY in Weston County - in Township 44.

We have been approached by two other landmen, and this week we were contacted by Meany.

Can you tell me which Township your families holdings are in?

Thanks,

Melissa

Melissa:

Our holdings are in township 41 North, Range 63 West...

For what it's worth.. Jim Berrtagnolli of Meany Land indicated that they have purchased a substantial amount of leases from the Feds ( at auction ) about 18 months ago but still do not have permits to drill.. although they do expect to get them shortly. I believe these leases are nearby our property. I do not know what nearby really means.. could be a mile or two or twenty.

My family belongs to the group that believes a bird in the hand is worth 46 in the bush.. so they took the $40 per acre.. on a 5 year lease.. which is really a 10 year deal if they get anything going.. so we are hoping something commercial comes of this and the money to be made will be from the 14% royalty I was able to talk them into.. Not that ..that is a big deal.. They offer 12.5% initially which is standard.. but in some areas of the country the number can be far higher.. i.e.17% to over 20%... The problem with Weston county is the lack of great success so far. Let's keep this conversation going.. We are locked in now.. so we are interested in others getting involved to generate activity.. Meany would not budge on the $40 number.. I believe they paid the Feds. $42.. But that doesn't mean someone else might not offer substantially more.. This is a competitive business. Best of luck.. and if you are young enough .. consider being patient.. at least for a few months. Darrell

Hi Darrell,

Thanks for sending me your Township info.
We've been approached by one company out of Casper and another out of Denver. One offered $20 per acre, the other $50 per acre. And both only offered 12.5% royalty. Both deals, like yours, could be a 10 year deal if they get anything going (5 year lease with option of 5 year extension).
You mentioned that Jim from Meany had said they had leased a lot of acres from the federal government. I found this link that I thought might interest you. It shows what companies leased rights for on federal land in Wyoming in Aug 2010 - note that Meany is listed 4 times, paying $47-75 per acre, but it doesn't specify where in Wyoming this acreage is.
http://www.blm.gov/pgdata/etc/medialib/blm/wy/programs/energy/og/leasing/2010.Par.92740.File.dat/08results.pdf
My family hasn't signed anything yet, but I'll let you know when they do or if I learn anything else of interest.
Melissa


Darrell L. Jansa said:

Melissa:

Our holdings are in township 41 North, Range 63 West...

For what it's worth.. Jim Berrtagnolli of Meany Land indicated that they have purchased a substantial amount of leases from the Feds ( at auction ) about 18 months ago but still do not have permits to drill.. although they do expect to get them shortly. I believe these leases are nearby our property. I do not know what nearby really means.. could be a mile or two or twenty.

My family belongs to the group that believes a bird in the hand is worth 46 in the bush.. so they took the $40 per acre.. on a 5 year lease.. which is really a 10 year deal if they get anything going.. so we are hoping something commercial comes of this and the money to be made will be from the 14% royalty I was able to talk them into.. Not that ..that is a big deal.. They offer 12.5% initially which is standard.. but in some areas of the country the number can be far higher.. i.e.17% to over 20%... The problem with Weston county is the lack of great success so far. Let's keep this conversation going.. We are locked in now.. so we are interested in others getting involved to generate activity.. Meany would not budge on the $40 number.. I believe they paid the Feds. $42.. But that doesn't mean someone else might not offer substantially more.. This is a competitive business. Best of luck.. and if you are young enough .. consider being patient.. at least for a few months. Darrell

Melissa:

$50 is better than the $40 we got... But still way cheap if something gets going... I'm in NW Colorado ; Steamboat Springs.. Not a lot of activity here but recently leasing is picking up as the Niobrara Formation may be in this area as well as over by Cheyenne.. Recent leases have averaged around $800 an acre.. Not that you should expect anything like that in Weston county..... But to put things in perspective.. some lands in No. Dakota in the Bakken play go for $1700-$2000 an acre.. Quite a difference from $50... But the deal is the real way to make significant money is to have a discovery on your property. That's when the royalties kick in.. 12.5% is not bad 14% is better.. and in some areas i.e. the Bakken.. 17% and above is not uncommon.. How did I get 14%.. easy .. I just said 14% or forget it.. It really costs them nothing at this point.. and the leasing company is flipping your lease to a driller so the 14% becomes their problem down the road. Good luck.. but don't be in a hurry .Darrell Jansa