Our family has mineral rights in Weston County and we also have been contacted by Ironhorse. They sent a contract, which is now in the hands of our lawyer. The more i investigate the more I learn. I have contacted others to see if we might have a better option. It is my feeling based on nothing but gut that Ironhorse is just tying up all the land and will just bundle it and sell the lease to others. I have no evidence to back this up just a feeling.
Anyone else feel this might be correct?
I have no knowledge of Iron Horse… But in general I believe you are correct… This is what these guys do… They do provide a service… They take a bunch of small , separate pieces of ground and make a large package which they resell to drillers/ oil companies at a profit… Generally, with a few acres, it would be difficult to impossible to interest a major company but as a part of many thousands of acres… it is suddenly easier to get attention… So while it may seem that the landmen are making money for doing little… it is the way the business works… If they sell to the right outfit and that outfit pokes a hole on your piece of dirt or close… you stand to win… The alternative is to rent a rig and drill a hole yourself… Not easy and pretty expensive. There may be better offers out there… We took $40 and now Iron Horse is at $50… That’s a big difference… and still cheap compared to prices around the country… sometimes getting into many hundreds per acre to thousands depending on location. Weston county, so far, is the not the red hot spot… So a bird in the hand may be worth a couple in the bush. I advised my family to take the low offer and plan on making money on the 14% royalty should success happen in the future… That’s where the big money will be made… Again, my family is old and money today beat out a potential for bigger money in a few years. And getting the land leased sooner than later may contribute to sooner drilling … Which is when the fun begins. Darrell
Thanks for the input
Dean- We have not been successful in finding any better offer. One of the larger landowners in our Township 45 has told me they have accepted the $50 offer. I have been advised to strike the warranty clause cited in the Ironhorse contract. Other than that, I guess I will sign with them, too. Dick Pulver