Hey everyone. My mom inherited around 9 acres of mineral rights in Richland County, Montana. Near Culbertson.
There is a producing well in the area.
I’ve been negotiating with a contracted landman, and we’ve been going back and forth. He’s been, in my opinion, reasonable. However, he is taking a hard line on the royalty pavement (18.75%) net vs gross. I’m asking, due to the small size, for a free of deductions clause. I even offered to have any deductions capped at 5%. He flat out refuses to negotiate on this one.
I also asked for the extension bonus to be paid upfront, but we were able to agree on paying it at 100% when executed. Again not talking a lot of acres here.
He did raise the shut in clause that limits it to 2 years, but wouldn’t increase the rate from $1 per acre.
Anyway, I’m really stuck on the gross vs net question. I’m fighting for everything I can get (potentially) for my mom, and I just need to know how hard of a stance I should take on this one.
Where do you find lease royalties and other information posted for that specific T/R/S? Can you tell me what oil company is involved? I’m having a hard time navigating the various Montana websites. Thanks.
The leases are filed in the county courthouse, so you can find them there. Not sure if they have an online service. I pay for a subscription service that finds them. If a memorandum of lease is filed, you will only find the grantor and grantee and minimal information, not the royalty percentage.
Phoenix Capital has the majority of the leases from the last 36 months, but only shows a memorandum of lease. Kraken Oil and Gas is listed at 19% which could be a pure 19% or might be a rounded amount for a 3/16ths lease which is 18.75%. Purified Resources has leased at a listed 17% which is pretty close to a 1/6th lease which is 16.66666667%