How do I get to your previous emails. I can seem to get around in this site. You sent an email re talking to your attorney in Culbertson.
Hello again folks. My elderly mother in law recently received offer on 30N 57E Sec 27 from EOG. Charles, I believe this is near year you. Offer was 2 year option to extend on previous lease ($200/per, 16%) whixh expired 2/26/2014.
EOG’s current offer is $100/per acre for 240 acres.
Just gettig into research off currenr rates. But this strikes me as really low, especially to lock up for another two years.
Meanwhile, any reality checks, observations, recent offers appreciated.
Many thanks as always. Best, Joe
I just checked webmapper and it looks like there is a fairly good well producing in that Section with Cardinal Oil in the Ratcliff Zone. That does sound low. We just leased in T29N R57E Sec 1 with Continental $1500/acre, 3 years, 20%
Linda. Thanks very much for fast and helpful info. Wow. That is a big difference indeed. I will check webmapper myself. Also, I understand that basically the way it works is that you basically wait around after a lease expires for a good offer. Is there a more proactive way to find a fair-paying lessor you or anyone knows about? Thanks again much. Joe
I sent feelers out to LoneTree as they have a Ratcliff well on another section of ours. However the lease below the Ratcliff is available now because of our pugh clause but they haven't responded. I also sent inquires to Continental as to both sections and then they contacted us on the one we just leased.
I understand from what you wrote that EOG had a 2-year option to pick up the lease on her property after the first period expired. You need to check her lease as to language because if they have the option I don't know if you can lease to someone else. On our properties LoneTree had a 2-year lease option at the end of the first 3 years and they just sent us a bonus payment at the same rate of the first lease to lease for the additional 2 years. When the 2 years was up we were able to begin looking for someone else to lease below the Ratcliff zone and also to pick up our other property which is the one that leased to Continental. You need to check the lease.
I also work with an attorney in Sydney who is very helpful on all of this.
Joe & Linda
Be sure to take Linda's advice and read your lease carefully. This rate is extremely low but the lease may leave you without any other alternative. You are in the vicinity of my mineral area to the SW (several miles away). This is why I don't grant any extensions on a lease as it obligates the lessor to additional years at the old bonus amounts. Again, check your lease and see if this extension has some wording which would help you. Linda, still waiting for a new lease and so far, $1,000/acre is the best offer with a 20% royalty for 3 years. I will sit and wait as all my MT leases are expired and I'm not in a hurry to lease. I'm still optimistic that the activity will increase in this Eastern MT area over the next couple of years and would not be surprised to see some very large spacing unit applications be set for hearings with the MT Oil and Gas. One problem that I believe exits in this MT area is the operators are still on a learning curve on how to produce the Bakken zones that exists in this area. It takes alot of money to play this game and the smaller operators will have a hard time staying in the game. EOG and Continental have the necessary capital to stay and this might be what you will see in the future. Joe, hope all works out for you but the main goal is to get that well or wells drilled on your mineral area. Be sure not to grant any lease extensions in the future and consider a pugh clause in your lease if applicable.
Charles. Belated (as usual) thanks on your excellent (as usual) suggestions. Now that I’m done traveling for a bit in my day job, will go back and take a close look at lease language. Will keep all posted. Best joe