Brigham said on our last lease to write “send check” and return drafts and we got a check in about 10 days. They may NOT do that if any questions in titles or recent transfers of title!!
it is a 5 yr lease with 4 yrs left.does that mean at the end of the 5 yrs we can renogtiate if there is oil ?
Ralph:
If your minerals are not drilled on and the lease expires, you can renegotiate a new lease or be top leased prior to the expiration date. If your lease contains a pugh clause, then you could lease other formations (if applicable). You might want to read up on “pugh clause” to get a further understanding about this if you aren’t familiar with this.
The next lease should only be a two or at least a three year lease. Dont do another 5 year no matter what the bonus or royalty. A nice bonus is good but the real money is in the royalty and terms. Remember at the end of the day no matter what terms you make it is YOUR OIL they need !
I concur; after hearing about a person that got $2000 and acre and 23% Royalty because he was right next to a great well just makes it more obvious that the shorter a least the more they are encouraged to drill. The above example would just be delayed another year if they had had a 5 year lease and NEVER gotten a big bonus and most importantly 23%. As one former landman said on another drilling site; the first 25% CAN be negotiated! Of course they start at half that (12%);so be careful with leases!!
GV is fast approaching 23%. McKenzie Cty is over 25% /$5000. per acre in certain areas.
Joel
$500.00 per acre plus 20% in Nov of 2010 would have been over double for what they were offering in that area at that time. Even by 2011 standards that is still a good offer ! Some friends in Beach we know signed last Feb 2011 for $250.00 at 20% for 3 years. Which at the time was good.
We have received an offer of $150/acre with 1/8 Royalty for 3 years from Shale Exploration. Our mineral rights are located in Daniels County, Montana, on a reservation. Does anyone on here have any idea if this offer comes even close to what it should be? And any info on this Company? What is our next step in finding out all the information necessary to get the best deal we can and maybe a higher offer from another company? I need all the help I can get from knowledgeable people on this site. Thanks
Sandra:
Looking over the June and Sept. State mineral auctions, the $150/acre bonus appears to be in the neighborhood of a fair price. I also think it depends on where in Daniels County your minerals are located. For instance, in the Sept. auction, minerals in 34N;47E went for $160/acre; while in 37N;43E went for 360/acre. Also, keep in mind that State Auctions will bring more /acre than you will recieve. The 3 years is a good lease term but the 1/8 royalty is low in my opinion. This, in my opinion is the most important factor in leasing as this is what you will be paid from in the event of a well. I would negotiate at 20% royalty and see what happens. I am not familiar with Shale Exploration but they are most likely a lease broker who is either leasing for an operator or will just flip your minerals to another operator. I did notice that Diamond Resources Company also was active in the State Aution for this area. Hope this information helps.
Thanks for the reply Charles, our minerals in Daniels County are: SE1/4, Sec. 27, Township 33 North, Range 44.
I pretty much read the posts to try to learn about leases & royalties but I wanted to comment on what my mother signed with Empire Oil in Sept. 2008. A 5 year term and 15% royalties. I have a copy of the lease which states the bonus as Ten and More ($10.00 & more) which now makes some sense to me as A.B. stated that bonus amount’s are not recorded. I really appreciate the knowledge base and information in this forum.
T141N, Range 105W, Sections 19&30 Golden Valley County
Our lease…which we signed in 2009 was for $150 per acre with 18% being the royalty. This lease was for 3 years and carried a 2 year option for the oil company at $250 per acre…with same 18% royalty. Thus, if drilling takes place this year…lease is finished. If not, the oil company has the option for two more years at $250 per acre. However, I do know of someone who in 2010 signed a 3 year lease for $300 per acre with the same 18% royalty…this was for land west of us…still in Roosevelt County.
It is very likely the going bonus and royalty rate has NOW increased to those numbers with all the new wells in that area. If you notice I posted with the phrase “pre-Nistler” and also posted the date of his actual recording being 2-11- 2010; as very unlikely to have gotten that amount he posted here.
Along with public accessibility to these records, also any one of them documents may be photocopied, and I even noticed some landsmen taking digital photos of the documents.
If you read on page 4 of your lease (the Exhibit A) page, the paragraph verbatim says:
Wherever the fraction one-eighth (1/8) appears in the paragraphs herein the same is hereby changed to read fifteen (15%) percent.
As for your comment to 1/6th being equivalent to 20%, I am no math major, but most everyone would have to agree that is not 20%.
My intent here, is to keep it real for everyone, as I said before; deception helps nobody.
A fish story; this was the real size >XXX> ** but tells everyone it was ** >XXXXXXXXX>
Recently, on this thread; it was stated that Fall of 2010 he signed with Whiting Oil for 23% and nearly 2000 a mineral acre. He then later stated his land description as well as his real name in a later post. The land description and last name was accurate.
Recordings in a court house are public accessible. Knowing the Beach area and what many others had leased for, this amount seemed fishy.
The first name given was a variation of the recorded name, but the last name was the same. The recording was 2-11-2010, not in the fall, and was clearly leased by Empire Oil, not Whiting. The lease assignments went to Whiting in the fall. There are 5 different family members among this lease offer (from names he also posted) and they were all at 15% Royalty for 5 years. The bonus amount’s are not recorded, but unlikely to be at the nearly 2000 an acre as posted.
The bonus amounts other members have posted, are more realistic, pre-Nistler well.
This post by mlh is very realistic:
Comment by mlh 14 hours ago
Joel
$500.00 per acre plus 20% in Nov of 2010 would have been over double for what they were offering in that area at that time. Even by 2011 standards that is still a good offer ! Some friends in Beach we know signed last Feb 2011 for $250.00 at 20% for 3 years. Which at the time was good.
This website was designed to be helpful for mineral owners. Deception helps nobody.
A. B. I am now looking at a copy of my families document… you are right in that the deal was not for 23%…indeed i was mistaken about that, however on the other hand, I am also looking at a royalty amount of 1/6 which is equal to 20% and not 15% as your investigation reveals. Obviously I am not confused about who are my relatives, so no need for you to concern yourself with that. The acre bonus is very high, I was told near the two thousand mark and stated it as a general figure, as you discovered, that information is, at this time confidential. Actually, to be quite truthful, I should not take the liberty of offering up any details of our family business and did attempt to do so in an effort to help others not to deceive them as you claim. To do so and be picked apart for it does nothing to encourage others to offer information and risk your wrath…
The market prices are very different depending on your location. Just 10 miles can make a difference. That is why it is so important to know what the people area you have gotten in the past. I heard talk of a website going up with the maps all the bonus/royalty/term that mineral owner signed for by company per area of sections. I guess it’s very interactive and you can know who signed for what amounts. You have to put your own information in to get the results.
David:
If you get a chance to lease again, forget the 2 year extension and only go for a 3 year maximum (preferably 2 yr). Did your lease contain a pugh clause, as this would possibly allow you to lease again even though a well was drill?
Zeb
If you negotiated directly with Whiting you would get a better because the land man ( or middle man ) and his company ( most likely Empire ) share of the deal were excluded. Leaving Whiting more room to directly give the mineral owner a better deal. In which I think all the deals should be. Those landman companies make good money by getting a percent of all the leases. You just cut out the middle man and took his profits. Yes! Now was your uncle in the oil industry or who did he go about making the deal ?? Any advice for us ?
I would not put much credence in State auctions; they are for 10 years and always distort real value. I think $350 is more realistic!!
In 2008 that would have been a standard or fair lease. But many things have changed in the area you provided since 2008. If you use Flash Earth you will see many new well projects in the making since 2008. That changes the market prices for that area alot. The numbers have increased greatly and will continue to do so in the future as those wells become productive. You may want to check the Maus , Nistler, Brookheart wells.
I would not even consider a anything more than a three term, try for two year. Nothing less than 20-25% royalty, with a bonus in the $500-$2000 per acre depending on your location for 2012