Powder River County, MT oil & gas discussion group. Share your experience regarding lease bonus, royalty rates, drilling activity, and oil & gas news.
I've been contacted by two companies recently regarding purchasing mineral rights--have others been contacted, too?
Linda, over the past few years there have been several offers to buy mineral rights in the producing Bell Creek Oil Field. There is nothing wrong about the offers. However, be aware the field operator is about to start injecting CO2 to increase production. So don't sell unless you need the money, and if the offer is for a fairly handsome price.
Also, there has been some modest leasing activity lately in portions of Powder River Co. outside of the Bell Creek Unit. I'm not sure what that is about, or what they are speculating on. As far as I know the offers to lease have been for $10 to $15 per net acre. That is my two bits.
Thanks for your response and helpful information. Does the range for "handsome price" vary quite a bit?
Linda, I am trying to get information on the area as well.
Do you mind sharing who you have been in contact with and what kind of $ numbers they are throwing around?
Offers for Bell Creek Minerals are based on your existing royalty payments. Typically most offer to purchase based on 50 to 60 months of your current royalty payment. So for an example, let's say your April royalty payment was $200.
50 months times $200 = $10,000 offer to buy your minerals.
60 months times $200 = $12,000 offer to buy your minerals.
In exchange for selling, they're offering to pay you today what you might receive over the next four to five years (if oil prices remained the same and if production rates constant). Since CO2 injection is about to begin I would discourage anyone from selling at these levels. Since it is rather in depth I will create a new thread above on "Bell Creek Offers" to explain this more fully. If you're interested please read it too.