I own some minerals in Williams County, North Dakota and have been approached by a company that wants to lease from me. I was wondering if anyone knows what fair terms are for this area. The company is offering a 3 year term, 3/16 royalty, and $700 an acre. I have limited knowlege, but the term and royalty appear decent. I am just not sure about the bonus offer. Thanks in advance for any insight or information.
Juan
Juan:
You can go to the website (www.land.nd.gov) and find out what mineral acreage has leased for over the past several sales. On that site you will see "State Lease Status"; click on "Legal Description"; enter your Township/ Range/ Section and it will show you the $/acre information. We have minerals in Williams County near the Montana border and I have noticed that drilling is slowly getting into this area. Our minerals were leased back in 2008 and won't expire until 2012 so I really don't know what the current $ bonus amount is for this area. From what you said, your lease term sounds good but you might want to try for a higher royalty amount. These company reps have a ceiling on their offer and you will find out what it is if you go for higher figures. Also, you might want to shop around for a better offer before you sign. Good luck!!
Why would you accept 3/16 (18.75 percent) when so many other companies are offering 1/5 royalty (20 percent)? What is the company going to do with your minerals once you have granted it the exclusive right to drill? Is it going to drill? Is it going to sit on your minerals waiting for some other company to drill? Is it going to sell (assign) your lease to another company? Have you checked the NDIC GIS map to see if the area where your minerals are located has been spaced? or to see if there is any activity near your minerals? What percentage ownership does the company have in the spacing units where your minerals are located? What other companies are actually drilling in or near the area where your minerals are located? How is the company going to pay? By sight draft? Be careful. Does the company intend to record your lease before it conducts a title check and decide whether or not to pay? What steps are you going to take to make sure that the company cannot record the lease before they pay? Have you checked the ND Land Management website latest auction results to determine how much companies are paying for bonuses in your area? Are you in a hurry to accept the first offer....
Lots of questions....and more.....that need to be answered before you give your consent to lease to anyone. Ask them to put answers to your questions in writing. Don't believe anything you are told unless you have iron-clad verification.
Charles and DG,
Thank you for the response and information provided. It seems my limited knowledge just became much more limited! Apparently I have a lot of homework to do.
Thank you again,
Juan
There is a gentleman on this forum by the name of Mr. (Mat) Ekblad who is pretty knowledgeable about mineral leasing and the going bonus amounts in ND. He may stumble across this discussion or it might be worthwhile to send him message. I have also heard of leasing just certain depths (i.e. just the bakken formation) with a mineral lease so it might be advantageous to look more into that.
Where in Williams? I can beat that. Let me know if you are interested.
DAP56:
Do you what mineral acreage in the T157; R103 area of Williams County is leasing for? Appears most areas are spaced but not much drilling activity in this area yet.
DAP56 said:
Where in Williams? I can beat that. Let me know if you are interested.
Juan
It may be a pretty fare offer. It depends on where your minerals are located. If they are in the NW corner of the county that is a decent offer. If they are towards the East end then you can fare probably a bit better. Many people want you to take a look at the state sale numbers, well that is not comparing apples to apples. State lands that are auctioned more often then not will bring a higher price for a multitude of reasons.
If you woud like to contact me feel free and I can discuss the different aspects that you want to see when you are doing a lease.
To Philip, thank you for the kind words. Information is paramount.
Mat Ekblad
DAP56 & Mat,
Thank you for the info. Our mineral is located in 158/100/22. I did look at the Oil and Gas Division GIS and it appears there is a well (yellow circle) almost on our section. The yellow circle is in 27 just to our south. Would this increase the value of our minerals? Thanks again for any info or insight.
Juan
Juan; if I understand you correctly that is a confidential well. After the well is no longer confidential and it’s production is known, it could increse the value of your interests considerably. I’d wait a little while. I don’t think anyone will disagree that lease offers are trending upward anyway. RWK
Its possible that the leasing company is associated with the operator who drilled the well next to yours. It could be a pretty good well and as a result they are looking for areas near that well. If that was your first offer you could negotiate and possible get 1000 bonus or maybe a little more.
Mat: I am sure I am not the only person who is grateful for your contribution to this forum. From what I have read, it seems you have helped out quite a few people with your input and have also helped people get better offers. Thank you
You’ll want to sign with a reputable company who will be drilling the well. If you sign a lease with a broker you will have no choice as to who will be drilling your well and paying you royalties. There are a lot of brokers out there that will sell or assign your lease to someone else and take a cut of what could be yours.
Hello DAP,
I have the following interests open if you are interested:
Sheridan & Daniels Counties, MT:
-161.30 NMA in 322.60 gross: Section 36-T34N-R51E & Section 1-T33N-R51E
Sheridan County, MT:
-80 NMA in 160 gross: Section 3-T33N-R54E
Divide County, ND:
-5 NMA in 160 gross: SE/4 of Section 30-T162N-R101W
-120 NMA in 240 gross: Section 17-T161N-R100W
Williams County, ND:
-74.50 NMA in 149 gross: Section 19-T159N-R101W
Thanks
DAP56 said:
Where in Williams? I can beat that. Let me know if you are interested.
Mat and DAP56,
I see where you both are trying to lease peoples mineral rights in the forum, If you lease someones mineral interest will you be doing the drilling or will you be trying to sell that lease to someone else in hopes of making a profit or an override off them? Also if you are going to sell or assign to someone else will you be paying the bonus in advance or only after you sell or assign. Have you ever cold drafted anyone (not paid) ? I have minerals in Williams and tried to get some answers from Mat after he said he pays more than XTO because I thought about seeing if he was interested in mine but he wouldn't reply.
Mineral Joe I come on here and try and help people with questions and concerns. If I can offer a better deal for people I try to do the best I am able. No I have never cold drafted a mineral owner. I have been in the buisness of oil and gas for many years. If I can help a persson get the best bonus and RI rates for a person, the bonus and RI goes to the mineral owner directly, not to me. I have a good name in this buisness, it is what I hang my hat on.
Like I have stated multiple times on this forum. Info is paramount. if you want to speculate and begrudge everything anyone writes on here that is your choice.
Whatever, as long as your telling people your going to be selling their lease to the same company they could have and that you are going to take part of the bonus or royalty they could have got with REAL help. What is the best bonus and RI, what they get from you or you get when you flip it? Info. really is paramount.
This will be the last conversation that I have with you on this forum.
I work for multiple operating companies, when I get leases they go to those companies. Not me. I get paid by the companies, to run title on leases that THEY lease. I try and help people by including all the right information into there leases and can get there minerals reviewed by multiple companies to try and get the best bonus. If you would like to speak to me over the phone Miner Joe feel free to contact me at my office, I would love to hear from you. If people want my help that is great, if not that is there decision. I have offerd my help, period.
whatever, say what you want but your story certainly has changed and what you say doesn’t even make sense or add up.
Hi Juan, the website Charles gave you is for a State Auction--completely different from private ownership leases. This is the lan the state owns and can be bought by various Oil and Gas companies. The reason they are so much more per acre is because the paperwork has already been finished, there is no title to clean up and there isnt a long list of owners to run title through-its clean and comes with no strings attached which is why it goes for so much more. Oil companies do not have to pay for a landman to run title for them, they can just buy chunks of interests from the state.
As for your offer, I think it is a good one. 3/16th royalty is not bad at all and yes some people shoot for the 20% which would be ideal, but 18.75 is not so bad either. 3 year term is good and I would maybe ask for more on the upfront bonus just depending on where your lands are at in Williams. Good luck!
charles s mallory said:
Juan:
You can go to the website (www.land.nd.gov) and find out what mineral acreage has leased for over the past several sales. On that site you will see "State Lease Status"; click on "Legal Description"; enter your Township/ Range/ Section and it will show you the $/acre information. We have minerals in Williams County near the Montana border and I have noticed that drilling is slowly getting into this area. Our minerals were leased back in 2008 and won't expire until 2012 so I really don't know what the current $ bonus amount is for this area. From what you said, your lease term sounds good but you might want to try for a higher royalty amount. These company reps have a ceiling on their offer and you will find out what it is if you go for higher figures. Also, you might want to shop around for a better offer before you sign. Good luck!!
