Does anyone know current lease/royalty rates for Richland County, MT. Got a call from Transcontinental wanting to lease the mineral rights my family has there. I know the area is heating up. Any help is appreciated!
Lou Anne What is the description of the land. section, township, range?
Lou Anne:
You are correct in that this area is in the "bulls eye" for increased activity in 2012 - 2013. Looking over past State Auction sales, it appears that in March 2011, bonus/acre went from $435 - 1500/acre in T26N;R58E areas. Of course, bonuses in State Auctions will be much higher than what you can expect to recieve. Bottom line is that you must do your homework such as checking with neighbors who have recently leased, contacting operators who have minerals in your area and you might want to post under the "County" section of this forum for Richland County. This "County" section is made up of individuals who hold acreages in Richland County. By all means, hold your lease negotiations to a 3 year lease and 20% royalty with "pugh clauses" included in the lease. Just remember, when the drilling gets "hot", it will take only one great well in your area to increase the value of your minerals even more. Good luck.
Have two parts. One is 22N, 55E, Section 14:W1/2 or 22N, 56E, Sections 7:E1/2, 8, and 9. I haven't called him back yet because I wanted to be prepared. Thanks in advance for any advice.
Del Nollmeyer said:
Lou Anne
What is the description of the land. section, township, range?
Lou Anne:
You might also want click on "Mineral Help" at the top of page, there are several good tips about leasing discussed on this site.
Lou Anne Gillson said:
Have two parts. One is 22N, 55E, Section 14:W1/2 or 22N, 56E, Sections 7:E1/2, 8, and 9. I haven't called him back yet because I wanted to be prepared. Thanks in advance for any advice.
Del Nollmeyer said:Lou Anne
What is the description of the land. section, township, range?
Dear Lou Anne,
You apparently control a significant amount of acreage in an area that has a good future for drilling in the next 5 to 15 years. Because of that, you are in a very good position to realize your expectations from your minerals. I suggest that before you respond to Transcontinental you and your family or any other owners in the property, get together and find out what everyone would like to get from the property then learn about the parcels' physical potential to the industry. At that point, you have a point to bargain from and Transcontinental and others will respect your wishes in counter offers that reflect their expectations from the area due to your large position.
I've been dealing with Transcontinental for over 8 months for some parcels in Colorado. They, like ever other company in the leasing business, will only look at what they want to give you. It isn't until you tell tim what you think is fair to you and your family that they will take you seriously and attempt to strike a bargain that is good for both parties. It may take a while but time is on your side in protecting your long term desires. They, as well as other good exploration companies need your land to perpetuate their businesses. With your acreage position, you have a great many options. The leasing companies know that but do not want you to understand those options. (In my case, Trans laughed at my geology based counter offer but have come back repeatedly and are now paying 1400 percent over the original offer and at owner designed lease terms. )
Be patient, thoughtful, and well informed in your deliberations thinking first about your long term business plan and protection rather than a one time bonus amount for a non-producing asset. Small acreage owners don't have that option. You apparently do have many options.
Thanks for your thoughtful input to my question. I did talk to the guy from Transcontinental and just got the "hurry up and sign" lingo. There are 18 of us involved in this and I hate to be the bad guy holding this up for everyone but I am not happy with the offer. They want to lease 320 acres in 22N, 55E. Whiting Petro previously had a producing well on that part and it was recently released from shut in. I am not too concerned about the bonus amount but would like the royalty to be higher because I do believe with the new technology, there will be a good producing well. Transcontinental said that was all they could offer and needed the leases signed by Dec 31. He was willing to add a Pugh clause. My attorney in Sidney, MT, is on vacation until Jan 4 and I don't want to sign it until he reviews.
I know I may be rambling....but it is a lot to consider especially with the other family members involved. I do not know them or their financial situations. Love this forum! There is an incredible amount of information on here to help people like me. Thanks again!
Gary L. Hutchinson said:
Dear Lou Anne,
You apparently control a significant amount of acreage in an area that has a good future for drilling in the next 5 to 15 years. Because of that, you are in a very good position to realize your expectations from your minerals. I suggest that before you respond to Transcontinental you and your family or any other owners in the property, get together and find out what everyone would like to get from the property then learn about the parcels' physical potential to the industry. At that point, you have a point to bargain from and Transcontinental and others will respect your wishes in counter offers that reflect their expectations from the area due to your large position.
I've been dealing with Transcontinental for over 8 months for some parcels in Colorado. They, like ever other company in the leasing business, will only look at what they want to give you. It isn't until you tell tim what you think is fair to you and your family that they will take you seriously and attempt to strike a bargain that is good for both parties. It may take a while but time is on your side in protecting your long term desires. They, as well as other good exploration companies need your land to perpetuate their businesses. With your acreage position, you have a great many options. The leasing companies know that but do not want you to understand those options. (In my case, Trans laughed at my geology based counter offer but have come back repeatedly and are now paying 1400 percent over the original offer and at owner designed lease terms. )
Be patient, thoughtful, and well informed in your deliberations thinking first about your long term business plan and protection rather than a one time bonus amount for a non-producing asset. Small acreage owners don't have that option. You apparently do have many options.
Gary L Hutchinson
Minerals Management