Recent Oil and Gas Lease offer - Converse

My family has received an offer on our mineral rights with a bonus pay out, and a royalty, on a primary term of 5 years. This offer has come not directly from the oil company but a broker, which may be standard. This is brand new to us and we are looking for some insight on what a fair bonus pay out and royalty percentage should be. We do intend on seeking some legal advice but I would like to hear from those with their feet on the ground in the area and or recent dealings in the vicinity. T35N R76W . Thank in advance.

Buddy Cotten helped me a lot and was very reasonable.\

Hope this helps.

I would stear clear of a broker. Brokers are NOT "standard". They pay little, then hold on to these leases with the hopes that a big oil company will come along and pay them much more. For example, we had a broker offer us $75. an acre signing bonus and 12 % royalty. We got $300. an acre signing bonus, and 18.75% royalty from Chesapeake Energy. If we had leased to that broker, and Cheapeake had given him the same offer that they did to us, he would have kept $125. an acre and 6.75% of the royalty for doing nothing. We also got 3 years, with a 2 year option to renew from Chesapeake. If Chesapeake renews after three years, they have to pay us the $300. an acre again. The broker just offered us 5 years, so we would have lost out on that renewel payment if we had signed with him.


In my opinion, the value of the lease may depend somewhat upon where your lands are located within that township. In general, lands to the east-northeast may have more value than lands to the south and west. The amount of acres you have to lease would also be important. The larger the tract, the more negotiating power you would have. I will post a couple of links at the end. They are the results from a recent BLM minerals auction. Look at tracts 146-152, they are in your area. I would also in general agree with the comments posted earlier regarding brokers. However, you need to understand what the broker's position is. Are they working directly for the oil company or are they "flippers" as Shelley describes. There is a difference. For instance, Lonetree is a company that EOG has been using lately to do their surface and mineral work. The links:

List of Tracts

Results page

All info is just my opinion. Good luck in your negotiations. Rob

Rob, Thanks for taking the time to reply. I was able to open the List of "tracts" link but unable to open the "results" link. If you have the opportunity to could you please resend the "results" link?


I suppose the results may be of interest ; ). Lets try this again:

If that doesn't work, Google "Wyoming BLM" and look for the Oil and Gas Leasing section. Rob

We're in the exact same boat, but 49N, 73W. I'm pretty clear on the term and the royalty (I think), but can anyone tell me what a good bonus offer would be? I appreciate the help! Sarah

Sorry- I meant 40N, 73W.


Your minerals in 40N, 73W are located in a fairly good area. EOG is very active in 40 and 41N, 71W. Also quite a bit of activity to the west of your minerals....say 40N, 75 and 76W. Several possible productive formations in that part of the world, but still pretty early to know how the economics will turn out. All that said, I'd shoot for close to a $1,000/nma for a bonus. Depending on how eager you are to lease, maybe settle for $500-$600. That would be for a 3-4 year primary term, then about 50-70% of the initial for a 2 year extension option. This is a much more active area than William's minerals in 35-76, so should bring towards the top of the market. It would help if you knew which company was interested, then you could check to see what they have paid for BLM and state bonuses.

Just my opinion. Rob

Thank you Rob, this is a huge help! Good idea to check the state and federal records- I'll look into that now. Thanks again!