I have recently been made aware that I have inherited a share in mineral rights for 40 acres in Cheyenne County. I have been contacted by Westphal L.L.C, and told I am the last person they needed to sign in order to begin drilling on this site.
This came as quite a surprise to me; I was not aware my mother still had an interest at the time of her death, and she didn't have a will. I am trying to get up to speed, and have spent some time researching over the weekend.
The legal description on the property is SE/4 24-15-43. If anyone has any information on oil & gas leases or active wells in this vicinity, I would be grateful. The offer on the table is $50 and acre, and 12.5% if oil is discovered. Since the guy told me I was the last person they needed to contact, it seems like I may be in a good negotiating position. My aunt already signed a lease, and we have joint ownership, but it is my understanding that I can still negotiate a higher signing bonus for myself.
How fortunate you are to learn about the mineral rights of your mother--you might enjoy my blog posting on Forgotten Mineral Interests especially with regards to updating title on the minerals. The COGCC website shows the active wells in Cheyenne County.
DISCLAIMER: The information in this posting is for general information purposes only. This posting should not be substituted for legal advice and should not be taken as legal advice for any individual case or situation. This information is not intended to create, and receipt or reading does not constitute, an attorney-client relationship. You are encouraged to contact an attorney for legal advice concerning the information provided.
Hi we are working with Westphal also, we are getting ready to sign lease, on mineral rights in Cheyenne County, our rights are at township 16 south- range 48, west 6th P.M section, 10 NW. My sister and I agreed with Wesphal for $75.00 per acre, and 15.2 % if they find oil. This is a 4 year Larsen lease, with 1 dollar per acre shut in royalty payments to hold the lease for an additional term of no longer than 3 years after the 4 years have expired on the orginal lease.
Westphal has not gotten the paper work correct, and it has to be redone, before we will sign it. Be very careful your lease is correct, and also ask for a little more. I think you should be able to get what we are even if your aunt got less. Best Regards, Betty Buckley- Wishing you many happy returns!!
PS -Is there anyone else in Cheyenne County who is reading this post who has gotten better that than 15.2 % on a 4 year lease at $ 75.00 per acre? We are thinking that is a fair amount, and as I said in above reply are getting ready to sign for those terms. Thanks!
We have several hundred acres throughout Cheyenne County, particularly south of Cheyenne Wells and both East and West of highway 385. We have had several offers from multiple landmen. The first one started at $50/acre but we turned it down. Our best offer so far, after some negotiating, is $125/acre at 1/8th royalty for 3 years with 2 year option.
My brother in law, who also has in interest in the mineral rights, works for an oil company in Houston as an analyst. He has talked to several of his friends throughout the oil industry who are advising him to hold out as they expect the prices to go higher. Although $125 is a good price for our area with regards to its history of leasing, I believe we are going to wait it out a little longer as we expect the prices to increase. The rumor is that Chesapeake is making a play in this area and I tend to believe it.
We were just contacted by Westphal as well saying we were one of the last ones that had not leased yet (not sure if I believe him as it seems a lot of people have not leased yet). He offered $115/acre at 15% with 5 year lease and 5 year option. However, as I stated earlier we have had a much better offer than that already.
just be careful and know who you are signing with. I have no first hand experience in CO or with Westphal, but I do have experience with CHK using shell companies in MI (I am not saying westphal = CHK)
You say Westphal, but who? If you search Westphal on the Internet you can find this respectable looking company out of UT; is it them? http://westphalenergy.com/contact-us/ Maybe but probably not.
If you go to the CO secretary of state business registry and look for westphal, I can find Westphal Oil; is it them? maybe not? why? well the OP says Westphal LLC.
If this is the exact name of the Lessee working in CO then that name doesn't exactly match the UT or CO company. You have to be sure they are registered in CO to do business (above link). You have to know the exact name of the company (watching carefully LLC vs Inc vs Co. etc.). You may find it is a shell company anonymously representing a bigger gasco. I have found it is a strategy of the lessee/landman/gascos to form companies that have names similar to well known, established companies to get automatic credibility (most people won't think to dig deeper).
I would insist on knowing who the client is. I also would not release my lease to any company without the immediate exchange of the agreed to sign bonus proceeds. Just take your time; be thorough and cautious.
I have no doubt that Westphal is working for a big oil company, but there is no way they are going to tell you who it is. That is the whole point of these big companies hiring out the small landman to lease up land for them. They don't want everybody knowing what they are doing. In most cases you can get a good idea though if you look at who these smaller companies have worked for in other areas. I see what you are saying about having the exact name of the company though.
Wilsontownship said:
just be careful and know who you are signing with. I have no first hand experience in CO or with Westphal, but I do have experience with CHK using shell companies in MI (I am not saying westphal = CHK)
You say Westphal, but who? If you search Westphal on the Internet you can find this respectable looking company out of UT; is it them? http://westphalenergy.com/contact-us/ Maybe but probably not.
If you go to the CO secretary of state business registry and look for westphal, I can find Westphal Oil; is it them? maybe not? why? well the OP says Westphal LLC.
If this is the exact name of the Lessee working in CO then that name doesn't exactly match the UT or CO company. You have to be sure they are registered in CO to do business (above link). You have to know the exact name of the company (watching carefully LLC vs Inc vs Co. etc.). You may find it is a shell company anonymously representing a bigger gasco. I have found it is a strategy of the lessee/landman/gascos to form companies that have names similar to well known, established companies to get automatic credibility (most people won't think to dig deeper).
I would insist on knowing who the client is. I also would not release my lease to any company without the immediate exchange of the agreed to sign bonus proceeds. Just take your time; be thorough and cautious.
I understand leasing anonymously and that is somewhat understandable. People still need to protect themselves from leasing to flippers or leasing to a shell company that it is hard to "go after" if needed. Frankly, I signed with well established well known landmen (local company) that was leasing anonymously and the leases (over 1000) were still canceled ONLY by their client (other leasing paid). it took legal action to determine the client was CHK.
So when being contacted by anyone (Landman or direct gasco) be sure to investigate them. Get their exact name and google them, check them out on boards like this and check with your state registry (secretary of state) to confirm they are licensed to do business in that state. As I noted, watch carefully the exact name because as I have said, a tactic is to name a shell company a name very close to an existing big name to confuse a landowner and/or provide instant, yet inappropriate, credibility.
I would be interested to have someone post the exact name of Westphal - just for an exercise, let's see who they are. And as far as who their client is - just tell them you won't sign unless you get documented proof of who their client is (just try it, if they want your land, they just may agree). You can really push them by including a clause in the lease that does not permit transfer/sale of the lease (this will stop flippers).
and lastly - regardless, whomever anyone signs with - ONLY ACCEPT CASH (company check, cashier check) and do not release the signed lease until you have "cash in hand".
of course, not to mention the lease details; which is an entirely different subject. Even if your sign bonus is low (or high) it is imperative that much time be spent refining the lease to provide landowner protections and compensation. EVERY LEASE that a landman will first present will be written with TOTAL favoritism toward the gasco - BE CAREFUL!
I am extremely pro gas, pro exploration, pro frack and believe the industry and especially the shale boom (both gas and oil) is of critical importance to our country. Unfortunately, you must be careful when leasing and I recommend working with an attorney that is an expert in gas/oil leasing (not just any atty, but a pro).
Wilson
Jason Schluter said:
I have no doubt that Westphal is working for a big oil company, but there is no way they are going to tell you who it is. That is the whole point of these big companies hiring out the small landman to lease up land for them. They don't want everybody knowing what they are doing. In most cases you can get a good idea though if you look at who these smaller companies have worked for in other areas. I see what you are saying about having the exact name of the company though.
Wilsontownship said:
just be careful and know who you are signing with.
i also received lease from westphal on march 6th. same land. offer 150.00 and 15% on oil or gas.
Betty Buckley said:
Hi we are working with Westphal also, we are getting ready to sign lease, on mineral rights in Cheyenne County, our rights are at township 16 south- range 48, west 6th P.M section, 10 NW. My sister and I agreed with Wesphal for $75.00 per acre, and 15.2 % if they find oil. This is a 4 year Larsen lease, with 1 dollar per acre shut in royalty payments to hold the lease for an additional term of no longer than 3 years after the 4 years have expired on the orginal lease.
Westphal has not gotten the paper work correct, and it has to be redone, before we will sign it. Be very careful your lease is correct, and also ask for a little more. I think you should be able to get what we are even if your aunt got less. Best Regards, Betty Buckley- Wishing you many happy returns!!
PS -Is there anyone else in Cheyenne County who is reading this post who has gotten better that than 15.2 % on a 4 year lease at $ 75.00 per acre? We are thinking that is a fair amount, and as I said in above reply are getting ready to sign for those terms. Thanks!
i also received lease from westphal on march 6th. same land. offer 150.00 and 15% on oil or gas.
Betty Buckley said:
Hi we are working with Westphal also, we are getting ready to sign lease, on mineral rights in Cheyenne County, our rights are at township 16 south- range 48, west 6th P.M section, 10 NW. My sister and I agreed with Wesphal for $75.00 per acre, and 15.2 % if they find oil. This is a 4 year Larsen lease, with 1 dollar per acre shut in royalty payments to hold the lease for an additional term of no longer than 3 years after the 4 years have expired on the orginal lease.
Westphal has not gotten the paper work correct, and it has to be redone, before we will sign it. Be very careful your lease is correct, and also ask for a little more. I think you should be able to get what we are even if your aunt got less. Best Regards, Betty Buckley- Wishing you many happy returns!!
PS -Is there anyone else in Cheyenne County who is reading this post who has gotten better that than 15.2 % on a 4 year lease at $ 75.00 per acre? We are thinking that is a fair amount, and as I said in above reply are getting ready to sign for those terms. Thanks!
FYI - although our property is in 22-14S-46W in Cheyenne Co., we were just offered $125 per acre with Royalty of 15% interest with term of 3-yrs and option of 5-yrs at $125 .This was from Westphal Just thought you should know.
If Westphal is fronting for Chesapeake, good luck on gettting paid! If you tie up your lands for 8 years, you won't be able to take advantage of better offers later.
Ken G
T K Glidewell said:
FYI - although our property is in 22-14S-46W in Cheyenne Co., we were just offered $125 per acre with Royalty of 15% interest with term of 3-yrs and option of 5-yrs at $125 .This was from Westphal Just thought you should know.
I've held off Westphal for about 8 months now...we have interests in 16S-43...15S-42 and 51...about 225 nma total....just got newest offer of $150, 3/16th, 4+4. This started out at $50, 15% and 5 + 5....will probably still hold out a bit longer and get less time on the lease...I'm sure they're hoping to knock off some of the lease bonus in exchange for lesser time on the lease...I'll keep you posted:)
Betty Buckley said:
Hi we are working with Westphal also, we are getting ready to sign lease, on mineral rights in Cheyenne County, our rights are at township 16 south- range 48, west 6th P.M section, 10 NW. My sister and I agreed with Wesphal for $75.00 per acre, and 15.2 % if they find oil. This is a 4 year Larsen lease, with 1 dollar per acre shut in royalty payments to hold the lease for an additional term of no longer than 3 years after the 4 years have expired on the orginal lease.
Westphal has not gotten the paper work correct, and it has to be redone, before we will sign it. Be very careful your lease is correct, and also ask for a little more. I think you should be able to get what we are even if your aunt got less. Best Regards, Betty Buckley- Wishing you many happy returns!!
PS -Is there anyone else in Cheyenne County who is reading this post who has gotten better that than 15.2 % on a 4 year lease at $ 75.00 per acre? We are thinking that is a fair amount, and as I said in above reply are getting ready to sign for those terms. Thanks!