Should be no more than 30 days.
some advice to all, even if itās a big company, NEVER send your lease to them before you receive your check. nor should you take a draft. you can send them a scanned or faxed version that has your signature on it. neither of these can be recorded. an unscrupulous operator can record your lease and never pay you. honestly, this is like giving someone the title and keys to the car youāre selling and letting them pay you later.
I recently signed a lease with BHP. Could someone who has leased with them tell me how long it takes to get a bonus check?
Wade,
Great advice - Very true. Treating it like any other asset sale is a great comparison.
Susan,
Generally, you should receive your check in no more than 2 weeks with BHP.
I would hope it is worth around $10K/NMA
Net Mineral Acres
Iāve had an acquisition company in Abilene wanting to buy my lease. I told them I didnāt want to sell. They offered to buy half and me keep the other half. They offered a pretty nice price for 1/2 of it. Given the price of oil and the prospects of the price getting better for the next couple of years, it is tempting. Anyone have an experience in anything like this?
Any feedback appreciated,
GKirk
EM - surface has nothing to do with the minerals. land is a general term whereas surface and minerals are much more specific. If you own nothing but surface you are entitled to no royalties whatsoever from the minerals. if you own minerals and no surface, you receive no funds from anything such as salt water disposal wells, seismic, right of ways, the sale of water, etc.
if you own the minerals you can have executive rights and non-participating rights. NPR means you donāt get to share in the bonus or the negotiation of the lease. you do get to share in the royalty so hope that the person that has the executive rights makes a good deal.
all depends on your current needs. I had someone call and offer us 8k per acre recently. I told him weād take 50k/acre. said heād make a note. hasnāt called back. after thinking a bit, honestly, I think we might take 15k.
When you say āsurface,ā Iām assuming that means owning the land, and, therefore being a participating rights holder. The opposite would be a nonparticipating rights holder. Is this correct? Are royalties computed the same for each? Thank you.
Steve ā the decision to shut-in a well is based on the operatorās cash flow related to the well (operator revenue minus the severance tax, royalty, and direct operating expense). There is a cost associated with plugging and abandoning a well, so the operator will try to keep an uneconomic well in the shut-in status as long as possible. This also keeps open the option to produce the well if prices increase. Also, since oil/gas will slowly migrate to the wellbore (lowest point of pressure) even in low permeability formations, there can be a increase in the rate of production (compared to the rate when the well was shut-in), but the increase will not last long.
In some offshore wells where the cost to abandon is very large, an operator might rationally choose to keep a well flowing even with negative cash flow to put off abandonment as long as possible. This, however, is generally not the case for onshore wells since the plug & abandonment (P&A) cost is relatively so much less.
Steve, Do you own surface? If so, what is the situation with the surface? Is it under lease and if so, are there any wells on it? There are alot of factors that go into setting price. If you compare the value today of 20 years of royalties on even an average new well in Reeves Co., you can easily come up with figures of more than $20,000 per acre.
Yes, we do own surface. Several things going on as we speak.
Glen - they want to buy your lease or your minerals? if they want to buy your lease, they need to go to the person you leased to, and they can buy it. If they want your minerals, they can get those from you. Iām with Wade Caldwell. If they will pay 20k per net mineral acre Iād seriously think about it. Not saying I would, but Iād sharpen my pencil.
Wade, I own only a portion of the mineral rights under the ground. A local exploration and production company in Abilene has the lease with me. I donāt understand the ānet mineral acreā language. Can you briefly explain it? The have offered me $60,000 for half of my lease. Sounds inviting but I need someone with some experience to advise me before I do the wrong thing.
Thanks for your willingness to help,
Glen
Thank you so much for all the helpful responses. In a section of 320 acres, discussing mineral rights, do I understand correctly that there are either: just participating rights holders or a mix of participating rights holders and nonparticipating rights holders? Does the fact of there being nonparticipating mineral rights holders dilute the royalties of the participating rights holders? Am I understanding correctly that participating rights holders own a specific area, such as the northwest quarter, while the nonparticipating rights holders own so many net mineral acres across the entire section? In other words, 10 NMA equals 1/32 of the royalties for a well anywhere on the property? Thanks.
If you own 100% of the minerals under the entire section you are in your net mineral acres would be 640 because there are 640 acres in a section. If you owned 50% then your nma would be 320 acres. You need to determine how many net mineral acres you own and then divide the $60,000 by that number. That will give you an idea if itās a good idea or not.
If you do decide to sell for 60k, let me know. I just might buy them myself.
Wade, several of us own an interest n 340 acres that has a producing well on it. I have a 1/4 royalty interest. I donāt understand how any of this works but before the decline of the price per barrel the checks were very nice. Expectedly, the last one was much less than normal. I can stand to wait until the tide turns plus I am nervous about selling. My intuition is telling me not to sell but there is wisdom in a multitude of counselors.
Thanks for your time and wise counsel,
GKirk
Thanks,