My grandmother owns mineral interest in the referenced area. She has received offers to lease this section but needs to know what a reasonable lease rate is. We have heard anywhere from $5,000-$30,000 per acre. I've scoured the discussion's on this forum and don't see any confirmation of pushing the upper end ($30,000) during negotiation. Help! Thanks in advance!
When you hear about $30,000, this is a price that a company purchases a block of acreage which has been assembled by another company, often with a number of producing wells which establish expected production volumes. The seller has incurred the cost of title research, landmen, geologists, etc. Most companies have not paid this level of cost per acre. It is extremely unlikely that a mineral owner would receive a bonus of $30,000.
Cami,
TennisDaze is correct, when a company goes out and gets a bunch of leases from mineral owners like yourself and will drill a well or two on it and then will sell it all as a package to another company for much more than they paid for it. That is why you see the $30,00-$50,000 per acre number thrown around. They are paying for the current oil being produced from the wells that were already drilled along with the leases on the land that has yet to be drilled. Those numbers are for a company to company transaction that involves leases and exisiting oil production.
When an oil company approaches you to lease the per acre bonus you will receive will probably be more in the range of $1,000-$3,500 per acre.
Best,
Cameron
Thanks for the replies. I also checked with a local landman and he mentioned that lease rates around this area could reasonably go for $15,000/acre due to the Wolfbone wells in the area.
Cami,
That landman could be right, but from what everyone I have spoke with who have leased recently the per acre price for a three year lease hasn't been higher than about $4,500 per acre. The per acre price for selling minerals is in the $15,000-20,000 range. I have not heard of any lease bonuses being anywhere near that high, but again I could be wrong.
Best of luck,
Cameron