Weld County, Colorado - Oil & Gas Lease Offers

Weld County, Colorado, just got hot. "Jake" gushed sweet crude. I recently received a leasing offer. According to the sage advice on this site, it's a good idea to talk to my neighbors with rights who are also getting offers. So... calling Weld County...

Hi Carolyn, As I understand it–I’m a rookie too–unless one owns a sizable mineral interest outright, say all the mineral on a 180, it is important to have an entirety clause so that you, as a minority mineral owner, get to share in the drilling proceeds of the entire plot. A minority mineral rights owner has, for example, an undivided 15/320ths of a half section. That works out to 4.69% mineral interest in the half-section. If the royalty interest is 16 2/3%, that works out to a payment of .7% on every barrel of oil. If there is one well on the half section that pumps an average of 100 barrels a day at $80 per barrel, the holder of that mineral interest can look forward to a monthly royalty check of $1680 per month. I think I’m right, but I’m no expert. Mike

Carolyn Mills said:

Mike,
I did see Weld County’s lease at 20%. I don’t know how to leverage it, though. I also don’t know what an “entirety clause” means. What’s a minority lease? I thought I was getting educated, but all this just goes to show how ignorant I really am.

I do have an attorney with no conflicting interests. I can give you his name, if you’re looking for one.

Also of interest: a land agent on the western slope whose contact info I got through a mutual friend, contacted her only contact on this side of the mountains. She was told the $100 and 15% were the going rate in Weld Co., but that everyone is getting the three year paid-up, without options, and said I should insist on the three year lease.

Hope that’s helpful.

Carolyn, Everyone says hold out for a % of GROSS, not net. In other words, no costs taken out up front.

And looking at some of these other threads in this forum, I see people routinely being offered $250 in other states, some even in the thousands! How can there be such a huge difference? I would sure hate to take $150 if we can get more. Not being greedy, just doing what oil companies do and “maximize profit.”

Mike said:

Hi Carolyn,
As I understand it–I’m a rookie too–unless one owns a sizable mineral interest outright, say all the mineral on a 180, it is important to have an entirety clause so that you, as a minority mineral owner, get to share in the drilling proceeds of the entire plot.
A minority mineral rights owner has, for example, an undivided 15/320ths of a half section. That works out to 4.69% mineral interest in the half-section. If the royalty interest is 16 2/3%, that works out to a payment of .7% on every barrel of oil. If there is one well on the half section that pumps an average of 100 barrels a day at $80 per barrel, the holder of that mineral interest can look forward to a monthly royalty check of $1680 per month.
I think I’m right, but I’m no expert.
Mike

Carolyn Mills said:
Mike,
I did see Weld County’s lease at 20%. I don’t know how to leverage it, though. I also don’t know what an “entirety clause” means. What’s a minority lease? I thought I was getting educated, but all this just goes to show how ignorant I really am.

I do have an attorney with no conflicting interests. I can give you his name, if you’re looking for one.

Also of interest: a land agent on the western slope whose contact info I got through a mutual friend, contacted her only contact on this side of the mountains. She was told the $100 and 15% were the going rate in Weld Co., but that everyone is getting the three year paid-up, without options, and said I should insist on the three year lease.

Hope that’s helpful.

There are also areas in the U.S. where people receive $20-30 per net mineral acre.

Pat said:

Carolyn,
Everyone says hold out for a % of GROSS, not net. In other words, no costs taken out up front.

And looking at some of these other threads in this forum, I see people routinely being offered $250 in other states, some even in the thousands! How can there be such a huge difference? I would sure hate to take $150 if we can get more. Not being greedy, just doing what oil companies do and “maximize profit.”

Mike said:
Hi Carolyn,
As I understand it–I’m a rookie too–unless one owns a sizable mineral interest outright, say all the mineral on a 180, it is important to have an entirety clause so that you, as a minority mineral owner, get to share in the drilling proceeds of the entire plot.
A minority mineral rights owner has, for example, an undivided 15/320ths of a half section. That works out to 4.69% mineral interest in the half-section. If the royalty interest is 16 2/3%, that works out to a payment of .7% on every barrel of oil. If there is one well on the half section that pumps an average of 100 barrels a day at $80 per barrel, the holder of that mineral interest can look forward to a monthly royalty check of $1680 per month.
I think I’m right, but I’m no expert.
Mike

Carolyn Mills said:
Mike,
I did see Weld County’s lease at 20%. I don’t know how to leverage it, though. I also don’t know what an “entirety clause” means. What’s a minority lease? I thought I was getting educated, but all this just goes to show how ignorant I really am.

I do have an attorney with no conflicting interests. I can give you his name, if you’re looking for one.

Also of interest: a land agent on the western slope whose contact info I got through a mutual friend, contacted her only contact on this side of the mountains. She was told the $100 and 15% were the going rate in Weld Co., but that everyone is getting the three year paid-up, without options, and said I should insist on the three year lease.

Hope that’s helpful.

Springfiled out of Hotsprings SD (which say they are part of Noble) have offered a 5 year at $60/acrea paid upfront in full with a 1/8 of production. In the T9N R64W area. Additional term of 3 years and as long thereafter. I will be contacting my water agent. (It makes a pretty check)

Pat said:

We’re weld county mineral owners getting offers too. Let’s talk.

Looking over the lease papers through “open govenemnt” Jake #2 owners received 1/8 th The diagonal wells one mile NE of Eaton received 17.5% Weld County Board accepted a bid of $305 / surface acre for mineral from Hannon and Assoicates for S1/2N1/2, SW1/4, SW1/4SE1/4, S25 T10N R61W ($109,800)

EOG in late December petitioned for well permits on 58 sections (one Horizontal well for each 640 acre) in the 11N and 12N R62 & R63 COGCC hearings February 10, 2010. Landowners listed in doc.

TAXES - on the initial lease payment could be very costly. It appears that incorporation may be necessary.

Since EOG/Synergy/Noble have offshore offices in tax free zones - it may pay to setup accounting and payments in an alternative setting that they provide.

Sherry Bynum said:

5 Years is way too long. I have mineral rights in Weld County and I have been approached by 5 companies ranging from 5 years to 1 year with the majority being 2 years.

Carolyn Mills said:
Mike,
I did see Weld County’s lease at 20%. I don’t know how to leverage it, though. I also don’t know what an “entirety clause” means. What’s a minority lease? I thought I was getting educated, but all this just goes to show how ignorant I really am.

I do have an attorney with no conflicting interests. I can give you his name, if you’re looking for one.

Also of interest: a land agent on the western slope whose contact info I got through a mutual friend, contacted her only contact on this side of the mountains. She was told the $100 and 15% were the going rate in Weld Co., but that everyone is getting the three year paid-up, without options, and said I should insist on the three year lease.

Hope that’s helpful.

Thank you for this info. Sure looks like EOG to me then for the Township 11 Sections. I agree, taxes could be costly on the initial lease payment; however, if a person put a certain percentage of it aside for that purpose, it might cost less than defending an offshore account in court since the IRS is so focused on foreign accounts at the moment. Not to mention hiring a CPA with knowledge about that sort of thing. I have a feeling this will complicate my life enough without adding tiers of unknowns.

Abdul said:

Looking over the lease papers through "open govenemnt"
Jake #2 owners received 1/8 th
The diagonal wells one mile NE of Eaton received 17.5%
Weld County Board accepted a bid of $305 / surface acre for mineral from Hannon and Assoicates for S1/2N1/2, SW1/4, SW1/4SE1/4, S25 T10N R61W ($109,800)

EOG in late December petitioned for well permits on 58 sections (one Horizontal well for each 640 acre) in the 11N and 12N R62 & R63
COGCC hearings February 10, 2010. Landowners listed in doc.

TAXES - on the initial lease payment could be very costly. It appears that incorporation may be necessary.

Since EOG/Synergy/Noble have offshore offices in tax free zones - it may pay to setup accounting and payments in an alternative setting that they provide.




Sherry Bynum said:
5 Years is way too long. I have mineral rights in Weld County and I have been approached by 5 companies ranging from 5 years to 1 year with the majority being 2 years.

Carolyn Mills said:
Mike,
I did see Weld County’s lease at 20%. I don’t know how to leverage it, though. I also don’t know what an “entirety clause” means. What’s a minority lease? I thought I was getting educated, but all this just goes to show how ignorant I really am.

I do have an attorney with no conflicting interests. I can give you his name, if you’re looking for one.

Also of interest: a land agent on the western slope whose contact info I got through a mutual friend, contacted her only contact on this side of the mountains. She was told the $100 and 15% were the going rate in Weld Co., but that everyone is getting the three year paid-up, without options, and said I should insist on the three year lease.

Hope that’s helpful.

My family has fractional mineral interest in a 175-acre tract in Section 23, Township 4 North, Range 61 West in Weld County. We were first offered by a broker $60/Acre for a 5-yr paid-up lease with an option for 3 more years at $40/acre with 14% royalty… They sent the wrong papers the first time, and when I called back they voluntarily increased the offer to $125/acre and $65/acre option with 15% royalty. This made me wonder if something “hot” is going on in the area. Then this week I read in the Oil and Gas Journal about EOG’s Jake well in T11N, R63W and the 400,000-acre lease position they’ve acquired in the area. That’s some 45 miles from our acreage, but it’s in the nature of a “resource play” in fractured Niobrara, so it may be prospective over a large area. I wonder what others have been offered in the vicinity of our lease.

The two players in the area are certainly Noble and EOG (Synergy also???) Anadarko with the Union Pacific RR mineral rights is in the cat-bird-seat. (odd numbered sections in general)

Does anyone know of an example of a surface lease agreement in the northern Weld area and what it pays?



I did not intend to mislead, or give false hope … especially on Tax Day. Seek a qualified accountant.

As a US citizen income tax must be paid for the year of dispersal.

U.S. tax on the income earned abroad is taxed in the same way you pay the tax on income earned in the United States.

If your tax home is in a foreign country and you qualify under either the residence test or physical presence test for the entire tax year, you can exclude up to $91,400 for 2009.

However, some states to not have income tax, Alaska, Florida, Nevada, South Dakota, Texas, Washington, and Wyoming if you have bona fide residency

As the 88,000 USA accounts that were revealed by Swiss banks this year demonstrate the tax haven protection of the past is a nice fairy-tale for the grandkids.

Sherry Bynum said:

Abdul could you please elaborate on your last statement concerning setting up alternate accounting and payments?

our family has just been contacted by a broker for EOG. We know very little about our rights. Can anyone direct us to easy, quick, layman’s information? Thanks

These are the most valuable links I have to research Oil and Gas in Weld County Colorado

EXCELLENT COLORADO OIL and GAS CONSERVATION COMMISSION - DateBase (well reports/opperators) www.cogcc.state.co.us

RESOURCE PLAY Like playing a video game - you can view the history, production, lease papers of EVERY well drilled in CO Clink, Zoom, type in quadrants - file reports are at the bottom of the screen in TIFF format. www.resourceplay.com/weld+county

Rocky Mountain Oil Journal for rig reports www.rmoj.com

Of Course this lovely place MINERAL RIGHTS FORUM www.mineralrightsforum.com

EXCELLENT Weld County Tax Assessor - Excellent FUN Map - for property owners and mineral holders and neighbors. http://www.co.weld.co.us/departments/Assessor/index.html

Local Newspapers:

GREELEY TRIBUNE www.greeleytribune DENVER BUSINESS JOURNAL http://denver.bizjournals.com DENVER POST http://www.denverpost.com

An educational video that explains the horizontal process - and steps to preserve water aquafers /www.northernoil.com/drilling.php

Bureau of Land Managment - Split Estates (different surface/mineral owners) and leasing EVERYTHING! www.blm.gov

Sincerely, May we ALL have a blessed and profitable posterity.

Does anyone know how to locate the ownership records of mineral rights in Weld County? We have been contacted and sent a lease but the lease states land in many places and we think our grandfather owned mineral rights and not land.

Also, does anyone have a name of a lawyer that is familiar with these types of leases?

Thanks

Sherry Bynum said:

You can google oil and gas leases in Weld County Colorado and that will pull up some good sites also google checklist for oil and gas leases. Please seek a lawyer to review your lease. The upfront money is nice but if a well comes in you need to be more concerned with the royalty part than the bonus money.

Kathleen Mallow said:
our family has just been contacted by a broker for EOG. We know very little about our rights. Can anyone direct us to easy, quick, layman’s information? Thanks

Just offered $3,400 signing bonus for 5 year lease of our 1/4 mineral/oil interest in an area not to far from Jake#2/Weld County. Also, 1/6th interest of any barrels produced and a lease of $85 acre…how much room for negotiating might I have before meeting with the oil company?

Sounds good. You appear to be in a hot area, i.e. where drilling soon may be likely. Five years is on the long end. Try for three. By 1/4 I assume you mean undivided mineral rights on 160 acres.

Lori Underwood said:

Just offered $3,400 signing bonus for 5 year lease of our 1/4 mineral/oil interest in an area not to far from Jake#2/Weld County. Also, 1/6th interest of any barrels produced and a lease of $85 acre…how much room for negotiating might I have before meeting with the oil company?

Start at the county clerk’s office to get a copy of your mineral deed. Then to assessor for initial map data. Then to mapping office (across the street to the right) for a print-out of a detailed map of county roads and sections. The web sites mentioned elsewhere on this site are excellent, especially CO Oil and Gas Commission.

Kathleen Mallow said:

Does anyone know how to locate the ownership records of mineral rights in Weld County? We have been contacted and sent a lease but the lease states land in many places and we think our grandfather owned mineral rights and not land.

Also, does anyone have a name of a lawyer that is familiar with these types of leases?

Thanks

Sherry Bynum said:
You can google oil and gas leases in Weld County Colorado and that will pull up some good sites also google checklist for oil and gas leases. Please seek a lawyer to review your lease. The upfront money is nice but if a well comes in you need to be more concerned with the royalty part than the bonus money.

Kathleen Mallow said:
our family has just been contacted by a broker for EOG. We know very little about our rights. Can anyone direct us to easy, quick, layman’s information? Thanks

1/6th is 16.6667, which is what my second offer came in at (up from 15%). First offer was $100/mineral acre, raised to $150/acre on second offer. Just balk and say people keep telling you you should get 17.5%, and that you heard the going rate around there was at least $150 an acre. They may say that’s the best they can do. Say, “well, send a lease to me and I’ll have my attorney look it over.” The lease may come with what you asked for, or at least more than their first offer. Good luck!

Lori Underwood said:

Just offered $3,400 signing bonus for 5 year lease of our 1/4 mineral/oil interest in an area not to far from Jake#2/Weld County. Also, 1/6th interest of any barrels produced and a lease of $85 acre…how much room for negotiating might I have before meeting with the oil company?

Thanks for your input…this is all so foreign to me! These mineral rights were purchased over 50 years ago by a long deceased relative and willed to us. Never planned on anything comingout of it! Unfortunately, what I meant by 1/4 is that we have 1/4 interest in the 160 acres…wish the relative would have invested 4 more dollars back in the 1950’s - what a return that would have been!

Mike said:

Sounds good. You appear to be in a hot area, i.e. where drilling soon may be likely. Five years is on the long end. Try for three. By 1/4 I assume you mean undivided mineral rights on 160 acres.

Lori Underwood said:
Just offered $3,400 signing bonus for 5 year lease of our 1/4 mineral/oil interest in an area not to far from Jake#2/Weld County. Also, 1/6th interest of any barrels produced and a lease of $85 acre…how much room for negotiating might I have before meeting with the oil company?

If there only four parties on that 160, it might pay to find out who they are and negotiated jointly.

Carolyn Mills said:

1/6th is 16.6667, which is what my second offer came in at (up from 15%). First offer was $100/mineral acre, raised to $150/acre on second offer. Just balk and say people keep telling you you should get 17.5%, and that you heard the going rate around there was at least $150 an acre. They may say that’s the best they can do. Say, “well, send a lease to me and I’ll have my attorney look it over.” The lease may come with what you asked for, or at least more than their first offer. Good luck!

Lori Underwood said:
Just offered $3,400 signing bonus for 5 year lease of our 1/4 mineral/oil interest in an area not to far from Jake#2/Weld County. Also, 1/6th interest of any barrels produced and a lease of $85 acre…how much room for negotiating might I have before meeting with the oil company?

Thanks Carolyn…you are helping me sort this all out!

Carolyn Mills said:

1/6th is 16.6667, which is what my second offer came in at (up from 15%). First offer was $100/mineral acre, raised to $150/acre on second offer. Just balk and say people keep telling you you should get 17.5%, and that you heard the going rate around there was at least $150 an acre. They may say that’s the best they can do. Say, “well, send a lease to me and I’ll have my attorney look it over.” The lease may come with what you asked for, or at least more than their first offer. Good luck!

Lori Underwood said:
Just offered $3,400 signing bonus for 5 year lease of our 1/4 mineral/oil interest in an area not to far from Jake#2/Weld County. Also, 1/6th interest of any barrels produced and a lease of $85 acre…how much room for negotiating might I have before meeting with the oil company?

It is easy and fun to search Weld County Mineral Owners (and surface)

You will want to use the CENTER Box - Top Choice - “Information and MAPPING” - do NOT use the left side box.

The mapping is offered through Merrick - and you will go through a disclaimer page.

Click around your area…You might be surprised who your neighbors are.

http://www.co.weld.co.us/departments/Assessor/index.html