Hi All
We received a 3yr lease offer, $100 bonus, 1/6 royalty for our .1148 gross acres. Turns out they already have 4 wells pumping for 2 years and somehow forgot about us. I want to have OMG attorney look things over but not sure if it is worth the money. So far, PDC (via Lonetree energy) can't tell us what the lease might be worth.
We are in T4 North, R 67 West, 6th PM Section 9. We just have a house on a small lot.
I can't decide if it is worth the cost of legal review or not. Any thoughts VERY much appreciated!
My email is PTOVAAS@TTCORP.US if you'd like to contact directly.
Thanks!
Pat
Making the following assumptions:
targeting the Niobrara
a really good well pumping 500 barrels per day (150 per day was the reported average, but I don't know if that is accurate anymore)
$100 per barrel oil prices
no expenses deducted from your royalty
640 acre spacing unit
you would make $545 per year
(365 days x 500 barrels per day x $100 per barrel x .1666666 royalty percentage x .000179375 (your share of the oil coming from that well--.1148 acres/640 acres))
if you change the assumption to 150 barrels per day, that changes the calculation to $164
I'm all for attorneys, but I wouldn't spend too much in this case. Do you have neighbors that have also been approached, so that you can share costs?
Of course it's possible that they aren't targeting the Niobrara. I don't know how the other formations have fared. You can go to the Colorado Oil and Gas Commission website and find specific information on the wells that are near you to see what formation they are in, and what the productions has been.