Wondering if anyone has an idea of the Lease value of Mineral Acres in this area. Typical length? 3 Years 5 Years? I have a little over 4 Acres here. I understand that a 20% royalty is the going rate but would like to confirm that also. Thanks in advance for any info.
Given the market and oil collapse this week of March 15, leasing may stop for a while until there is a recovery. Three years is typical. 20% is a common rate.
There was a productive well in that section. Oasis Karamojo Federal 2-4H which was online at least until Nov 2019. Your previous lease may have a savings clause that says how many months they can hold the lease with continuing operations. Oasis may be in financial trouble at the moment, so they may not be able to drill more this year.
Thanks for the quick reply. The well had some sort of failure I believe that put it out of production for the required amount of time causing the need for new leases. So they’re looking to get a new lease signed for 5 years. Seems like it’s hard to determine a lease value even for folks in the area, and sort of in the know.
At this point, you can either lease at a low amount for five years (if anyone is leasing), or just hold on and wait and see if lease prices go up and lease time frames go down.
Do you have an idea of what the bonus for a five year lease for these minerals acres might be worth. I’m just looking for a number in the ballpark. Seems to me it’s not enough acres to be terribly concerned about but just looking to get a rough idea if possible. I’m under the impression that mineral acre leases in some areas have went for in the neighborhood of 3k per acre or more for a three year lease. I may be way off on that though and I’m sure it varies a lot by area. From what I can tell this immediate area isn’t all that active. Thanks very much for the info and suggestions you’ve provided.
Given where the market is right now, there may not be any leasing. I would not lease for five years at all. Only three at the most. The going rate is pretty hard to judge right now unless I said $zero tongue in cheek.
Hello CJ First of all I do not propose to know your situation, that being said I also do not know the current offerings for a lease, however I do take exception to a five or more year lease. I have personally as do a vast amount of members here, never considered a lease that runs for more than three years. If they truly expect to explore your holdings, three years is sufficient , any longer than that gives them the opportunity to pass on you for two more years or more. The current price for oil may make you think that they have the leverage, they do not. This is all my humble opinion… Brian
Thanks Brian, Your comments regarding lease length agree with pretty much everything i’ve heard. Sounds like three years should be the max.