Potential Lease Kraken

Hi! We just received a lease offer from Conquest Enery as agent for Kraken Oil and Gas. They’re offering $500 per net mineral acre and 17% royalty with a lease term of 4 years. This seems really low compared to what we received 3 years ago. Does anyone know what the going rate is currently for Williams County?

Thank you, Tara

What is the legal description of your minerals?

Is this what you’re asking for?
Township 159 N Range 99 west, 5th p.m. Section 9: S2, NW4

You might want to look at the ND lease auction held last month: https://land.nd.gov/Minerals/OilAndGasTractsResultsByCounty.

It looks like the bonus per acre that Kraken offered is in the ball park of what they recently paid for other leases in your vicinity. However, I am not sure what the royalty was on these leases. Additionally, Lynx Oil Company bid more than Kraken on a few nearby leases, so you might try to solicit a competing bid from Lynx before doing anything with Kraken. Just my two cents, hope this helps. BH

I’ll check it out. Thanks so much for your reply!

The 17% seems low. 20% is more realistic and I think you can get that. The $500/acre seems about right, I don't think you will get the high dollar offered 4-5 years ago, but ask for 20%.

Thanks for your reply!

About 6 months ago, we signed a lease for a 400.00 bonus, 3 yr term and 18.75% royalty for rights not to far from yours. This was a little better than any other offers we have received in the last couple of years. Signing a lease now is a gamble, offers could go up or down depending on oil prices. I gambled on taking a lower bonus payment figuring that they would not drill if the price doesn't improve and in three years I hope to get another lease, maybe at a better offer. Taking some payment now was better for us than not getting anything and the royalty offered was OK but not great if they do drill.