Hi All- I have a lease set to expire in April 2012 and no well yet. Has anybody leased recently in the area basically several miles north of Tioga? My minerals are in Mountrail County in 158W-94W spread out in 2 separate pools. There has been drilling activity in adjacent pools. I expect to be contacted soon to release. I would love to know what bonuses and royalties are going for in that area. I've heard everything ranging from $800 to $2500/ac and 16% to 22% royalty. Please let me know if you have an idea so our family can get decent leases. THANKS!
Hi, I do not know what the leases are going for, but I invested in a partnership, "Reef Oil and Gas", and this month I got 19% return on my invested capital. The partnership is paying for oil drilling and administrative expenses so I would think an owner would get more. Some of these wells are in Mountrail county.
Garren:
Mountrail County is one of the hottest areas in the Bakken play. In my opinion, I would allow the lease to expire before negotiating a new lease as your position will be stronger for getting a great bonus and royalty rate. I would begin taking offers (never the first) and go from there. Bonuses in this area would most likely be in the $1800 - 2500/range but some areas of Mountrail County is hotter than others. I would not sign a lease for more than 3 years and settle only for a 20% royalty which has become the norm in this area. Sometimes during the negotiations, the offer will be more bonus money for a longer lease but I always insist on a 3 year max. I never put the major emphasis on the bonus money, instead, I want the 20% royalty which will effect your money for years. If they agree to a 22% royalty, most likely your lease will tied into a 5 year term which means that most likely it will take alot longer to get drilled on. Again, don't be in a hurry to lease and get several offers before making your final decision. Good luck.
Depends on location but last year McKenize county was getting $5000. bonus per acre /25% royalty.
Garren,
Charles has given you good advice. Let the existing lease expire. Then if it's not HPB start shopping it around. I'd start by asking $2,500 with 25% and see where it goes. Push for 22% and don't go below 20% on the royalty. You're in a producing area and will certainly get at least that royalty. On the bonus you may find $1,500 or so top end but start well above it to find out.
As to shopping it, make a list of the following; 1. Who has pooled your tracts. 2. Who has drilled within five miles or so. 3. Who has leased the State & BLM tracts in your township, or nearby in other townships. 4. Who currently owns your existing lease. Then find phone numbers for each of those companies and start making calls. You'll get better offers if two parties are bidding, you'll get your best offers if multiple (four or more) parties are competing.
The one place I differ with Charles is the length of term. Regardless of a 3 yr or 5 yr lease you are likely to be drilled before it comes around again. So if they'll pay an extra $500 or more for 5 yrs I'd take it. Go get 'em. Good Luck.
Thanks Charles & thanks Eastern MT for your input. Thanks for taking the time to help. One question in your response: what do you mean by "Who has pooled your tracts"? The rest I can run down or know. I know we leased before with Diamond Resources but Hess currently owns that lease.
Garren,
What I meant by "pooled your tracts". Oil companies have probably 'pooled' all of the acreage in your township into various Drilling Units. For an example, let's say some of your minerals are in Section 1. It's likely Section 1 and Section 12 (just below #1) have been 'pooled' into a 1,280 acre Drilling Unit.
So you want to learn which company applied with the NDIC for creating a drilling units above your minerals. That oil company may not be the same one who owns your lease (Hess). Though perhaps it is. At this point it is possible, yet unlikely, this hasn't been done on your minerals yet. I'd suggest you find out if it was done and if so, was it by Hess or another prospect. Good Luck.
Garren,
I'm doing leasing in this area, and I can tell you that it varies from section to section (location, location, location). The best way is to post them as available for lease, and then talk to several companies. Competitive bidding helps, though just like any thing if it sounds too good to be true, it probably is (if someone has a real high offer vs the others...look closely)
If you ownership is now in a planned drilling unit as it seems to be from your wording, there will be a little more competition on the bonus amount, as companies/investors try to get in on the action. Speaking of which I'd like to have a shot at bidding on your interests. [email protected]
What company are you with? I have some stuff in that county as well.
Cara, I'm with Transcontinent Oil. As a firm we are brokers that have been around since 1958. Currently I'm working for 3 different clients that are trying to get some lease holds and some ownership in western North Dakota. Montrail County is a little off their target area, but so far they've been pretty flexible and open minded and I'm sure they would like to at least look at what you have. Please feel free to email me.
Daniel:
Is any of your clients currently leasing in Roosevelt County, MT?
Daniel Dayton said:
Cara, I'm with Transcontinent Oil. As a firm we are brokers that have been around since 1958. Currently I'm working for 3 different clients that are trying to get some lease holds and some ownership in western North Dakota. Montrail County is a little off their target area, but so far they've been pretty flexible and open minded and I'm sure they would like to at least look at what you have. Please feel free to email me.
Charles, they did have a project that was leasing in part of Roosevelt County (I think the western/southwestern part). I wasn't on that project, so that's about all I know. I'm not even sure the project manager on that, but TCO is pretty nice about looking at various opportunities (they have a ton of clients and projects). You can contact them though their web site http://www.tcolandservices.com/ Heck it might even come back to me!
charles s mallory said:
Daniel:
Is any of your clients currently leasing in Roosevelt County, MT?
Daniel Dayton said:Cara, I'm with Transcontinent Oil. As a firm we are brokers that have been around since 1958. Currently I'm working for 3 different clients that are trying to get some lease holds and some ownership in western North Dakota. Montrail County is a little off their target area, but so far they've been pretty flexible and open minded and I'm sure they would like to at least look at what you have. Please feel free to email me.
Daniel:
Thanks for the info. My minerals in MT won't expire until late 2013, early 2014 but I will keep your info in mind in the event I get to lease the area again.
Daniel Dayton said:
Charles, they did have a project that was leasing in part of Roosevelt County (I think the western/southwestern part). I wasn't on that project, so that's about all I know. I'm not even sure the project manager on that, but TCO is pretty nice about looking at various opportunities (they have a ton of clients and projects). You can contact them though their web site http://www.tcolandservices.com/ Heck it might even come back to me!
charles s mallory said:Daniel:
Is any of your clients currently leasing in Roosevelt County, MT?
Daniel Dayton said:Cara, I'm with Transcontinent Oil. As a firm we are brokers that have been around since 1958. Currently I'm working for 3 different clients that are trying to get some lease holds and some ownership in western North Dakota. Montrail County is a little off their target area, but so far they've been pretty flexible and open minded and I'm sure they would like to at least look at what you have. Please feel free to email me.