The Hess Corporation has recently offerred us $900 per acre and 3/16 royalty for three years on this well or the option to participate in the cost of the well at a rough cost of $8,000 an acre. They don’t specify what our share would be if we do the second option. we understand that we would be at risk if the well is a dud but if the payback is much greater it would make sense to buy in instead of agreeing to the lease. Does anyone have any suggestions for us? we would greatly appreciate it.
You could also be carried, receive a 16% royalty from the first barrel. They would impose a 50% risk penalty that they could only take out of the other 84%, and if the well was a dud they could put a lien against the future production of your minerals. The minerals that aren't there, or the well wouldn't be a dud, would it ?
Our family recently went with the working lease. We did some checking with a lawyer and decided to try it. We will let everyone know how it goes for us.
I'll be happy to hear how things turn out. I have to admit that I don't understand what path you took,whether you leased, were carried, or bought in and became a working interest.
Kim Folstrom said:
Our family recently went with the working lease. We did some checking with a lawyer and decided to try it. We will let everyone know how it goes for us.
Bert, I have been wondering how you came out on negotiating a lease for your 3 existing and producing wells in that spacing ?