We are negotiating a lease in 7 N 60 W. We have been offered $125/acre, 1/6% and 4/4. No premium on renewal. Are these the going rates? Can we expect to do any better?
Thank you!
Hi Susie,
Rates are very low with oil in the $30's. A year and a half ago you could have gotten over $1,000 per acre and 1/5th (we did). If you're willing to wait for oil to pop back up a bit, the rates will go up, though probably not to the pre drop levels. Everyone has an opinion on where prices will be at the end of 2016, but there seems to be some consensus that we'll head back towards $50, at which point you'll be able to better negotiate.
Susie, I recently negotiated a $500 bonus with 18% Royalty for a 3 year term in 6N 61W for a 40 acre net mineral lease. Try for better terms. All they can do is say no but your in the drivers seat while they are still calling you.
Susie, 18 months ago as rates were falling we signed at $500/ac with 18% for 3 years with a three extension and same bonus amount. We are 7N 67W so maybe you can do better, or maybe you should wait. Either way I make the best decision I can, based on what I know today and don't look back, the "I should have" thoughts will drive you crazy.
Wow. Thanks so much. Who is your lease with?
Thanks, Tim. I believe you are in an area with better production, just west of us. I appreciate and agree with your advice on 'don't look back'. We signed 6 years ago before rates went up 10X. I didn't regret signing. Still not sure what to do here, though it looks like we should be able to get more.
Thanks, Thomas.
That's Weld County Colorado. Family owns 100% of 480 acres.
You guys are lucky. My family signed a lease for 320 acres in Weld County back in 1970 back when they didn’t offer bonuses and 1/8 was as good as you could get. Something important to consider though is the language in your lease. It might allow for the deduction of post production costs which can add up significantly. If your lease is silent on the topic and doesn’t make any reference to transportation, gathering or expenses you might be ok but it’s still a good idea to run it past an oil and gas attorney before signing anything.
I am in the process of negotiating at lease at 7n 66w. We are offered $450/mineral acre, 18.75% and five years. There seems to be some hangups about pooling acreage and whether as only mineral owners we have any need for protection from damages and claims etc by or against the lessee. Any advice would be helpful. We do have a lawyer.