I have recently been contacted by phone and letter by Spring Lake Energy. Has anyone else heard from them?
My family owns minerals in sections 2, 3 and 10 159-79. The spokesman said they (Spring Lake Energy) is a group of owners in the area interested in getting an oil company’s to drill in their area. He said his research indicates the Bakken extends under McHenry County, but the oil companies “haven’t gotten there yet”.
Spring Lake Energy has apparently hired Sovereign Natural Resources to search out prospective companies and negotiate leases on its behalf. I was sent a contract with Sovereign which, as I read it, would have the oil company paying their fee if a else is negotiated…
While I’ve been negotiating leases for several years, I admit to still being very much a “newbie”, and I’ve never heard of this before. Sounds like a good idea, but would appreciate any thoughts out there. Thanks!
If the lessee/operator is supposed to pay the fee, they are going to deduct it from your consideration anyway in any deal they agree to.
Not to say that having professional representation would be a bad thing. I would just feel better if my side was paying so I could hold the negotiators to a standard of ethics, since as above, it's a zero sum game and whatever deal gets negotiated, Sovereign's pay is going to reduce what you get.
I would suggest that the pay should come from the signatory mineral owners bonus (with pre-agreed royalty percentage), possibly a percentage, to encourage Sovereign to do a good job, also they are working for and paid by you they would have to avoid conflicts of interest.
Sovereign representing you and being paid by the lessee/operator is an instant conflict of interest.
Thanks RW. I may have interpreted the fine print incorrectly, but that was also my first gut reaction. Still wondering, is this something new or is it a fairly common tactic for encouraging E&P that I just haven’t run across before.
I believe I watched a show about Kansas farmers banding together to negotiate with operators for complete blocks. It looked like a good plan. It must have saved the operator a fortune in landman expenses, the landowners got a standardized lease with protective clauses and nobody got lowballed. I'm fairly certain that their negotiator wasn't on the operators payroll.
Help...I am researching for a friend how to sell/lease some mineral rights that he inherited in McLean and McHenry counties. These mineral rights are in his mothers name who is deceased and was left to my friend, through his father(mom's ex-husband). I know so far we have to get this transferred to my friends name and I have found a lawyer in ND that would do all the paperwork for $2100, but if the mineral rights are not valued at $2100 or more there is no point in paying to transfer. How, where or who can tell me how to get a value on these mineral rights? I think there is 300+ acres.
Cheryl, you really need to start your own thread to get the attention you need.
Not knowing where the minerals are, I can have no opinion as to whether they would interest anyone to lease or buy.
You need to give the legal description, township, range and section, so someone can look to see if there is any activity in the area. You also need to know if that is 300 net mineral acres or a smaller part, an undivided "interest" in 300 acres that may add up to only a couple acres (example, 1/128th interest in 300 acres). $2,100 is pretty cheap for a probate in the western half of ND right now.
Cheryl Rindflesch said:
Help...I am researching for a friend how to sell/lease some mineral rights that he inherited in McLean and McHenry counties. These mineral rights are in his mothers name who is deceased and was left to my friend, through his father(mom's ex-husband). I know so far we have to get this transferred to my friends name and I have found a lawyer in ND that would do all the paperwork for $2100, but if the mineral rights are not valued at $2100 or more there is no point in paying to transfer. How, where or who can tell me how to get a value on these mineral rights? I think there is 300+ acres.
Thanks...you at least gave me starting point.