Howdy. I was recently presented with a mineral lease for my share of a parcel. There are three other owners, we hold as tenants in common and I own approx 70% interest.
I have a feeling that one of the other owners is going to try to holdout. I understand that MT law allows for forced pooling, etc. so I'm not terribly worried about ultimately being able to realize the value of the minerals.
Is there something I'm missing? Should I be concerned about the holdout or not?
Would love to hear from anyone who has been through this.
Thanks
Walter:
First, where are your minerals located? If you hold out and the others lease then a well is drilled, you would participate in the well. I have never been a participant in a well as I have always elected to lease. If this is the first offer, I would wait depending on what the offer is but if no wells are located in your area, don't look for a large bonus/acre to be offered. If you would provide your township/range/section and also the amounts for the bonus and royalty, someone including myself might be able to advise you regarding your situation.
Walter, it depends on the % of acreage held by the non-consenting owner. 10 net acres of a 640 or 1280 acre pool is a much different story compared to 10 net acres of a vertical well on 40 acre spacing.
Walter,
Location of minerals, recent activity, production, and certainty of making a well or half a dozen wells is far more important in "ultimately being able to realize the value of the minerals" than what a hold out does. In fact, the holdout may be doing so because he has first hand knowledge of the items mentioned above and desires to maximize the value of his minerals. If you are east of or immediately west of the Brockton Fault, and anywhere near the Elm Coulee development, the value of your minerals near term will be far higher than if you are further west where it may not make any difference what you must agree to in order to get a well drilled. Knowledge of the new oil business is power.