I recently signed a 3 yr lease to a landman in Sidney Mt its my understanding that the company who is considering drilling has been ok'd for a permit to drill i was wondering after all the leases are signed what is the normal time if and when they decide to drill? My township is 21north 59 east 26 section richland county montana i guess im just wondering what time frame im looking at to receive a royalty check if they decide to drill thank you
You are asking the question that many ask...and there is no one answer in my opinion.
Permits to drill last 6 months...and I understand they are renewable.
I further understand that they are actively drilling in those areas where leases are set to expire so they don't need to lease them again...so...if you have a 3 year lease...they may NOT make your area a priority for the next couple of years because you have already received your lease money.
Once they spudd a well...I've heard anywhere from 6 months to 12 months and even longer until the royalty check arrives. The one well producing in our area sent a check about 6 month later. Another well in our area "spudded" in May of 2011 and we have not seen anything yet as they are having problems with this well.
So, as the landman I've been talking to (along with others) said to me, "Keep your day job" because all this is filled with uncertainty!!
Out of curiosity, who is the gasco involved with the 2 wells you mentioned?
The best guess I could give you is 6 months from the time they start drilling. I'm not kidding when I say guess either. If you are also asking, "when might they drill" that depends on many many things. I personally would find the following the most important. 1) How much they paid for the lease. If under $1,000 per acre, then I wouldn't expect a well this year. 2) Who the operator is going to be and 3) the activity nearby.
Permits in North Dakota I think are about $175 and good for a year. I imagine they aren't that different in Montana but I don't know.
You also give the parameter, "after all the leases are signed" so if all the minerals in that unit have been leased then what percentage of them will expire by what date. For example, If 80% still have 3yrs left on their leases, then there is no hurry to drill. There is no simple way to find out all that information, but like I said earlier, the amount you received per bonus acre is really a pretty good indication, as good as any, of figuring out when they might drill........$2,000 bonus acre would tell me they either starting drilling already or will soon within the next couple of months. $250 an acre would tell me that they will have no problem extending past the 3yr primary term.
There is no "normal"; it depends on drillers; companies, availability of rigs; just too many variables to answer your question!! The same as to when you get a royalty check; some wells have waited 130 days just to get fraced!! So the answer to your question would be "1 to 10 years"!!
Oasis Oil is drilling on our sites....
i kinda figured that thanks for replying.
Thank you for your input i figured as much my bonus was 375.00 an acre so they i would imagine could wait awhile i was just thinking since my area is 2 miles from the elm coulee field that it might be a possible hot spot and they would want to get started on drilling im sure they did testing of my area to get a permit but who knows im sure they have unlimited amounts of money to test thank you again.
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