Hello, I was contacted a week ago by a lady tracking my sister & I down as heir to some mineral rights. In the mail I received an Oil & Gas lease to sign from Lonewolf Energy. has anyone heard of them? The cover letter states the lease is for 2.2243 mineral acre interest which is half of the combined 4.4486. I have a draft for $889.72, for a 3-year paid-up lease calculated at $400 per acre for 2.2243 as sister owns the other half. The lease royalty has been increased to 20%. As these terms reasonable? Thanks for any and all input. The area is T37N, R57E, MPM. Section 06: Lots 8(40.00), 9(40.00), 14(38.53), 22(23.23),NE1/4SE1/4,SE1/4SW1/4 Section 07: Lots 1(38.59), 2(38.66),E1/2NW1/4.
In addition, the agreement is with VAALCO Energy. So LoneWolf appears to be the broker. Just looking for a quick education here as a week ago I didn't know anything about this mineral lease. All input greatly appreciated. For instance, how do I find out what activity is going on for this lease. Is it already active or can they not do anything until ALL leases are signed. Is a mineral lease like a land title that even though I am heir, do I need to file anything to transfer the lease to my name?
David:
Lonewolf Energy is most likely a lease broker involved in leasing for an oil company. Your offer of 3 years and 20% sounds good but the bonus of $400 might be a little on the low side in my opinion. There has been some development in the Sheridan County area over the past year and several drilling permits has been issued for additional wells in the County. You might want to negotiate for more bonus money as this company has a ceiling on what they will pay. Good luck.
David:
In addition to my last reply, you need to make sure that all paperwork is in order and the lease is properly filed with the County Clerk's office in Plentywood, MT.
David Kane said:
In addition, the agreement is with VAALCO Energy. So LoneWolf appears to be the broker. Just looking for a quick education here as a week ago I didn't know anything about this mineral lease. All input greatly appreciated. For instance, how do I find out what activity is going on for this lease. Is it already active or can they not do anything until ALL leases are signed. Is a mineral lease like a land title that even though I am heir, do I need to file anything to transfer the lease to my name?
Charles, Thank you for your reply. If you don't mind I would like to ask a few specific questions. 1. When you say "make sure paperwork is in order" what specifically are you referring to? 2. I assume you mean that after lease is signed I should check with the court house after 30-60 days to be sure a copy of the lease is filed of record or file a copy myself. 3. Do I need to consider the transfer of the actual mineral rights from my deceased father's name to me - like one would do with a warranty deed for real estate?
David, as you said, they had to track you down, and as Charles said there has been some activity, so you may want to check with the Eser site or the Montana state oil and gas site to see if there is already a well. I consider already having a producing well to be at least an advantageous position for lease negotiation. Your offer seems good enough for a first offer that there may well be a good well already, usually the first offer is pretty low. I am sure Charles meant #3 that you should have title in your name. As for the lease being recorded, after you are paid you could record your lease if the company didn't record their copy as long as there was no confidentiality agreement, I wouldn't really worry about that part though. I would worry about being paid. Ask to be paid by check and not by bank/site draft, bill of exchange or order of payment which are unenforceable IOU's.
r w, Thanks very much. I found the ESER site very handy. Not sure how up to date it is but it shows an inactive well in both sections of my lease. Maybe the intent is to reopen the well head and try a little fracking? A lot of activity in surrounding sections. This is quite educational and exciting. Again, thank you.
Mr. Kane, the Montana state site is good but unwieldy. Eser is fairly user friendly but as you have already surmised, it is frequently 6 months or more behind, alot can happen in 6 months. The Montana state site is worth learning to use. I have to pay a $50 subscription for North Dakota to acess all the information that Montana gives for free.
Mr Kane, this site can be very helpful
http://www.bogc.dnrc.mt.gov:4899/website/mtcbm/viewer.htm
Let it load up, then up on top line you will see a magnifying icon with a plus in it, Click on it and then click on the yellow map roughly where you are interested in, then do it again to narrow it down, after awhile you will see townships and ranges, now then on the left side of the screen you will see LAYERS, select what interests you ie:wells and refresh the map, now then when you have visible dots for wells on the map, up on top again click on the icon of the black dot with the i in the middle, then click on any dot on the map to display information about it..... lots of features, ya just gotta play with it..... good luck... Brian...
R W & Brian, Thank you very much. Final question that remains unanswered. As my sister & I are heir to my deceased mineral rights, do I need to actually transfer them into our names like one who do with real estate when buying a home or are mineral rights treated differently?
Mr. Kane, you should have the rights in your name. I hope it's easier to transfer minerals to heirs in Montana than it is in North Dakota.
David:
I did the same thing with my Montana minerals years ago and used Laura Christoffersen in Culbertson, MT. She did a great job in transfering mineral interests and her fees were very reasonable.