Weld County Colorado Leasing Amounts

Hello,

I am new to this forum. I am an owner of mineral rights in Weld County Colorado;

East 1/2 Section 9, Township 10N, Range 58W

Does anyone know what leases are going for in this area? We as a family are getting the estate in order and will have signing authority soon and want to explore leasing opportunities.

Any help would be great.

Jeff Fregeau

There has been lots of leasing activity in Weld Co. and some very nice Niobrara wells are being brought in. Google it, there is lots of info.

Good luck

Jeff, I am new to this forum as well. We are surface and partial mineral owners of 60 acres in Section 18, Township 08N, Range 66W. Chesapeake recently (11/07/11) starting drilling in our section. They offered us $600/acre for a 5 year paid-up lease and 18.75% royalty. There are new sites popping up in almost EVERY section around us as well, just in the last few months. We haven't signed it yet. We're hoping to negotiate a shorter term (1-3 yrs) and possibly higher royalty (20%). Also trying to figure out the details of the lease.

One question I have is this: If we only own 3/16 of the mineral rights for our 60 acres (100% of the surface), can we put a clause in the lease that states they do not have surface access? My guess is that we cannot, since we are minority mineral rights owners.

Another question about lease details: I've heard we should strike the Bona fide offer and Warranty clauses, and make sure the royalties are calculated off GROSS not NET proceeds. Has anyone heard or done similar, or have any other recommendations as far as how to protect yourself in the lease agreement?

I appreciate any info!

Jenna,

We own 320 acres of mineral rights with 314 acres surface. There is both production as well as drilling within 1 mile of the property. Also appx 1/2 mile away is the pumping station moving the oil to Denver for refining.

Jeff

Jenna H. Keller said:

Jeff - Leasing rates vary signifcantly by area. Your bargaining position will depend on the amount of mineral acres you own, how close in distance proven production is to your acreage, and the number of companies competing for leases in the area. The COGCC website is helpful.

This posting is for general information purposes only. It should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided.

Semi,

I spoke with my brother, he has leases with Cheaspeake, EOG and Devon. He suggest you call the landman who sent you the contract and tell him what you want. No more than 3yrs, no deductions, 20% royalty, and negoiate for more money per acre.

You should take a look at this resource: http://www.michfb.com/ecology/minerals

You cannot stop a mineral rights owner/leassor from using the surface, but they will compensate for the usage. Always strike the Bona fide and Warranty clauses.

Jeff


Semi Newbie said:

Jeff, I am new to this forum as well. We are surface and partial mineral owners of 60 acres in Section 18, Township 08N, Range 66W. Chesapeake recently (11/07/11) starting drilling in our section. They offered us $600/acre for a 5 year paid-up lease and 18.75% royalty. There are new sites popping up in almost EVERY section around us as well, just in the last few months. We haven't signed it yet. We're hoping to negotiate a shorter term (1-3 yrs) and possibly higher royalty (20%). Also trying to figure out the details of the lease.

One question I have is this: If we only own 3/16 of the mineral rights for our 60 acres (100% of the surface), can we put a clause in the lease that states they do not have surface access? My guess is that we cannot, since we are minority mineral rights owners.

Another question about lease details: I've heard we should strike the Bona fide offer and Warranty clauses, and make sure the royalties are calculated off GROSS not NET proceeds. Has anyone heard or done similar, or have any other recommendations as far as how to protect yourself in the lease agreement?

I appreciate any info!

An update:

We received a letter from a lawyer today saying that Chesapeake applied to force pool us. We only received the lease agreement Nov 18, and this application was dated Nov 23. According to the letter from the lawyer, Chesapeake applied for the pooling back in August, and found out about additional mineral holders in September or October. It says that they are sending lease agreements to all the 'new' mineral rights holders and we'll be given 30 days before pooling.

So now I'm wondering this: Do we have less negotiating power if we're on a time constraint to be pooled? And if they say our requests are unreasonable, don't we risk being pooled in the next month? Not sure exactly the best way to proceed.

Thanks so much for the input -- this forum has been a huge help.

Jeff, thank you so much for that site -- very helpful.

Jeff Fregeau said:

Semi,

I spoke with my brother, he has leases with Cheaspeake, EOG and Devon. He suggest you call the landman who sent you the contract and tell him what you want. No more than 3yrs, no deductions, 20% royalty, and negoiate for more money per acre.

You should take a look at this resource: http://www.michfb.com/ecology/minerals

You cannot stop a mineral rights owner/leassor from using the surface, but they will compensate for the usage. Always strike the Bona fide and Warranty clauses.

Jeff


I think you may have less negotiating power with Chesapeake, but I wonder, have you sought competitive offers ? Some would like to participate in a well that they know will be drilled soon. Chesapeake would likely up their offer to keep from losing all chance to profit from your acres, as they would if you leased to someone else and they participated. If you haven't sought other offers, hurry! If you want to lease.

Semi Newbie said:

An update:

We received a letter from a lawyer today saying that Chesapeake applied to force pool us. We only received the lease agreement Nov 18, and this application was dated Nov 23. According to the letter from the lawyer, Chesapeake applied for the pooling back in August, and found out about additional mineral holders in September or October. It says that they are sending lease agreements to all the 'new' mineral rights holders and we'll be given 30 days before pooling.

So now I'm wondering this: Do we have less negotiating power if we're on a time constraint to be pooled? And if they say our requests are unreasonable, don't we risk being pooled in the next month? Not sure exactly the best way to proceed.

Thanks so much for the input -- this forum has been a huge help.

RW,

How do you suggest contacting the other companies for offers? I know the names of a few other companies, but do not know who I would call to ask about leasing.

Thanks!