I received a lease offer from a Matt Farber with Emperador for $400 an acre and a 3/16 royalty. After a lengthy conversation he finally let slip that they were working on behalf of their client Continental Resources. Is this a fair price for the area? Given my past activity with Continental I’m inclined to hold out a bit and wait for the price to come up.
Thanks in advance for the advice.
What section? Location can make a big difference in Carter county. EDIT: hah, sorry, missed the title. Let me take a look real quick.
The best pooling orders I can find in the last 2 years is $350/nma for 3/16th royalty. 2016/2017 things were going for $500/nma for 3/16th but I haven’t seen any $500’s since then. Continental is in a good position financially (according to what I’ve heard and seen) so they’re a good operator to lease to. Continental, 89 Energy, Kodiak, and XTO/Exxon are active there. You might see how good of terms you can get on that lease. They may be more willing to negotiate things like post-production costs and term lengths more than lease bonus. $400 seems decently fair based on what I’ve seen.
Thank you for the info Tracy.
Our family had 117 acres leased to ( supposedly) Continental through Bearcat for 3 years beginning December 2015. 1/5 royalty and $502/acre bonus.-- 4S 1E section 6
An anecdote. Family gets offer for almost half million dollars for their collective interest in a county (not Carter). Family consults with a person who convinces them to ask for $800,000. Family and company go back and forth getting a little closer, but not terribly close. Then there is radio silence from the oil company. Family member calls land manager and asks if the $500,000 was still on the table. Company says, no, we drilled two very marginal wells and have no further interest in this county. Moral of story, if you hold out, and then a recession hits, the wells in Carter county turn out to be duds, or the Saudis and Russia get in a price war, and oil prices collapse Then, the offer goes away. Are you going to kick yourself for not taking the offer on the table?
Perfectly said! I see too many people on here “advising” people to play hardball or never to sell mins and convincing people companies are out to screw them when it just isn’t the case.
Thank you for the advice Mr Dowd. I do understand the risks of not taking the first deal, as I have been told that type of story before by every landsman that has called about property I own.
After holding out for several conversations i was able to negotiate the lease for $600 and 1/5 royalty plus some terms my lawyer buddy suggested on the lease form. Patience pays off people!
That’s fantastic to hear! Congratulations!
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