The usual suspects approached me. Not so sure about the utility of being the last; there are other approaches.
Has anyone else been approached recently? Does anyone have a feel for the monetary terms? It looks like these are vertical wells, rather than horizontal wells, for now.
Thanks.
Whiting bought acreage from a company within the past couple months, and I thought it was Petro Hunt. Does anyone know if Petro Hunt is still operating in GV? Also, does that change everyone currently leased with Petro in GV acreage, now to Whiting?
Yes, I know what you mean.
We probably could have held out for more bonus but I highly doubt the royalty would have climbed much above 19%. Plus, we just don’t have the time to keep going back and forth, and then dealing with the lawyers, etc…it is very time consuming.
Our lease was pretty straightforward actually. They don’t really budge on most of the language…but I feel it was fair
I looked up the Whiting purchase from Petro Hunt, but it doesn’t include GV county.
DENVER–(BUSINESS WIRE)–Aug. 27, 2013-- Whiting Petroleum Corporation (NYSE:WLL) announced today that it has signed a purchase and sale agreement with a private party to acquire certain producing oil and gas wells and development acreage in the Williston Basin in Williams and McKenzie counties of North Dakota and Roosevelt and Richland counties of Montana. The purchase price is $260 million, subject to customary adjustments, and the acquisition has an effective date of August 1, 2013.
We hear that the active areas are getting $1500.00 acre / 20% royalty. It’s all about location .
Yeah, it is always about location. 4 miles from my house is Athens, the roughest ghetto in LA (right under the LAX approach).
I am not seeing amounts that high near my section in the www.land.nd.gov/minerals/mineralsapps/leasesearch.aspx website
However, that information may be a bit stale as it looks like most of those leases are from 2012 and from February, 2013. They show royalties of 1/6th or3/16th and bonuses of $175 to $450.
Hi,
I just leased in 140N -105W for $225 bonus and 19% royalty, 5 year lease. I did get another offer for $325 bonus at 18% royalty…so that gives you an idea in that range.
Thanks
Thanks. That is the rough range of what I am getting offered (not that I am going to accept).
I am starting to get a better feel for what is realistic (the trouble with these blogs is that the information is of such uneven quality). It will be interesting to see what the facts are when that Davidson 12-31 well (in 141-104-31) comes off of the “confidential” status.
I too like bonus money up front, but the royalty is what really matters.
Does anyone have any feel for what sort of lessor-friendly lease language these oil companies will accept these days? There is certainly a lot of crap in these leases.
Well, my negotiations with Empire have ended, although we were not far apart. I am starting to understand a few things about these negotiations: 1. The land people really prefer to deal with clueless 88 year old widows, or baby boomers down to the last $10 in their checking accounts due to the bad economy in much of the country; 2. The land people have about an much authority as insurance claims adjusters for a 4th rate auto insurer handling minor fender benders. As such, it is really a waste of time talking to them, even if you are willing to be semi-reasonable. I don’t even know why I bother. I should know better.
Has anyone heard anything about the recent seismic activity in Golden Valley?
I have 27 NMA un-leased and was contacted last week. Who else is leasing in GV county other than Empire for Whiting?
That is approximately the same as the offer I got, but did not take. I pointed out that the state is getting more for its leases. These guys are running around low balling. Even if you are semi-reasonable, they baulk and move onto someone else. Still, don’t believe some of the silly high numbers often quoted on this site. There is lots of low quality information on these blogs.
For information on ND oil drilling :The Rocky Mountain Oil Journal
it has information that the ND oil and gas has as confidential.
Check public libraries.
Have not heard anything new about the seimic, but recent activity in GV in lease terms. GV has recently leased in the 20-21 % royalty if you hold out long enough. Some GV larger parcels have seen bonus acre in the thousands others at the $ 500-$850 range. The closer to the drilling date you are the higher value of the lease .You dont need to be leased by Empire their are plenty of other companies that have taken an interest in the area that will pay higher than Empire.
K&G Ranch hit a dry hole but dont let the land man use that tactic to scare you several new wells in that area are great !! Keep in mind that the landman companies lease/sell your lease back to Whitening for about $4000.00 per acre. We did not lease with Empire and did great.
I recently received an offer of $250 per acre bonus, 17.5% royalty on 45 acres in GV county (13-144N-104W), don’t know if anyone;s getting better offers.
When a land company speculates on land, goes out and leases acres, the cost of bonus is the negligible cost. The price rises steeply when an operator wants to acquire the leases to drill, they must pay the land company for taking the risk, pay well for the land companies title work which they had to perform and so the $4,000 per acre for an operator to obtain a lease from a land company, where you may have received $250 per acre in bonus amount would not be unusual. If the operator had leased the acres himself he could have $3,000 per acre invested in it after title work is done. The difference is paying for the risk that the land company took in leasing the acres.
GV leases have recently gone up to and beyond $1500.00-$2500.00 per acre…royalty of 20% + no less … And don’t lease any more than a half to one section per lease. If you have more land then they will have to pay you another bonus and lease which should be higher than the first lease so you double your money. Don’t let a landman tell you any different. Keep in mind you are locked into that lease forever once they drill, so what seem alot today is very little tomorrow. Plus you will lose 34% percent of that bonus when you pay income tax on it. In fact do not even talk to a landman because a lease is not in your best interest.
Mineral Owners best option is clearly a working interest. If you lease for 20% who gets the other 80%??. The landman and oil company. If you do a working lease you get 100% after expenses. This is a partnership between you and the oil company, the landman is out of the picture. So he is not going to advise you to do a working interest. You do NOT have to pay for your share of the cost to drill up front. It can be taken out of your future royalty payments so you do not have put the money up front or borrow to particate in the well. The oil company will drill and keep your percent of the profits (6-10)months, to pay your share of the expenses. Then after that you will get 100% of your share of the profits forever. Oil companies and landman do not advise this for one reason they get a large reduction on their profits because the bulk of the money is going to you. They will tell you that it is risky… Well do you really think that an oil company would invest million of $$ in a well that is dry… technology today reducing that risk to less than 1%. If you have producing wells in your area then it is less than .6295 chance of dry hole. Plus you can buy an insurance policy to coverage your risk. The real cost will be the insurance premium for the term of drilling 60 or 30 days, which is about $1200.00 for insurance. Plus the cost and profits are not taxed as regular income so you pay less in taxes. Clearly your best option is to participate via working interest instead of getting a lease. 20% of the profits or 100% of the profits. Get a good lawyer to fully explain all your options and ask about a working interest in detail.
If your lawyer does not give you options or information about working lease … get a different lawyer. Most people lease because they do NOT know about working interest. The oil company and land man do not want you to understand the options because they want the 80% profits.
Just remember that it is your oil at the end of the day.
Oasis was running around leasing last Fall (I did not lease because I was not offered acceptable terms), but that has supposedly stopped while they are allegedly conducting “seismic testing”. Does anyone know if there is a way to investigate that, particularly the results? My guess the company will claim it is proprietary, but the permits and plans must be public. Thanks. -JSM
I have been in contact with a land man from Empire as well regarding leasing some acreage and questioned the seismic findings. No result on findings. Any insight anyone can provide would be greatly appreciated. Seismic status has been in “Remediation” for what seems to be an extended period of time. Questionable or political delay?
Peter, the problem is partly the Bakken, there is so much acreage that is yet undrilled but it’s pretty much proven what the operator will get. The Birdbear and Red River formations are probably there in your acres but it will be real exploration to find them, and then, the nearest production to your acres is no better than the known Bakken and Three Forks that operators are targeting presently. The wells near you are operated by FH Petroleum Corp, not exactly a houshold name. I think it’s the reality that if it takes an operator 20 years to get around to testing your acres, the oil will still be there in 20 years. Those wells near you were drilled in 2004-2006.
I would remember how far drilling technology has come in the last 10 years, when you get a well it may be two to three times as productive, and the price of oil will probably be two to three times as much. You may literally receive 5 times or more in royalty from a well drilled in the near future than you would have received from a well drilled in 2004. To me that’s worth waiting for because when the oil is gone, it’s gone. An older well may have left oil that is recoverable today’s techniques in the ground. I know this does not help if you would like your minerals exploited now, but it’s a different perspective.