From the Nov 2011 auction Kiowa & Prowers Counties, the bonuses ranged from $75 to $375/ac. The State lease is at 1/6 royalty and as I recall is 5 yr term but no clear option to extend beyond.
I would not characterize these companies like McDonald, Martin, KDM and Diamond as 'shell' companies for big oil (CHK). Some (KDM) may have very few assets and consist of a just recently formed LLC by the principal of another company (McDonald) for the purpsoe of doing leases for a specitic client (CHK). But I beleive they are quite independent of their clients and provide a service that companies like CHK do not want to deal with. These companies have 'people on the ground' in the area and are doing all the 'grunt' work to track down the land owners, untangle the often spaghetti mess of fractured ownership and get as much of the acerage their client is interested in that they can at the best possible price. Once that is all done I believe they assign all the leases to their client. I don't know this for a fact, but I suspect that is the way it works... if anyone here knows for sure please let us know. Of course they try to lease low because they likley get paid a fixed amount (bonus and royalty) from their client and so they get to keep the difference. I know for sure this is what happened with my last lease in NM since I was told that directly by CHK and the landman. That lease I got 22.5%, CHK was giving 25% the landman got 2.5% for 'doing the paperwork'.
We have been talking with McDonald Land Services (MLS) and several other groups off and on for many months. MLS started offering $50 an acre but ended up offering $150 and 15%. We tried pushing them for more money which they rejected. If we had been further west in the county we may have been more competitive. The other companies wouldn't even talk to us after they found out where we were. We are in the 45 area as far south in Kiowa County as you can go. 33-20-45. We are on the border of Prowers and Kiowa Counties. After we signed with MLS, we waited 7-8 weeks before they sent us a standard company check which we cashed without problems. We agreed to a 5X5 lease with them. They have the option to renew or not. It is not the best, but with us being outside the really good areas west of us we felt that it was good for us. Even the state auctions were west of us several miles.
Congrats Bob, you have a lease in place. I am sure that feels good. Having a lease with CHK the 2nd largest natgas producer in the country isn't to shabby either. Don't fret the details now, just watch as the play expands and heats up. Hopefully everyone will be on a great run there. Watch the results of the wildcats! Producers are looking for oil primarily or wet gas. No market value for dry gas currently and even wet gas isn't stellar. Oil is the big target. However, what you might see (actually probably won't see) is the large leasing of mineral acreage as is currently taking place. Hopefully wells produce oil somewhere in the area. Good luck and again congrats with getting your lease buttoned up. Wilson
Hello, There does not seem to have been any comments since March 27. That is the same day that Matt Whitaker comented that he had a better deal than Chesapeake. Are these two things related? I am very curious to know…if someone could clue me in…Thanks… Lilly
I don't think there is any relation. Many people here like myself have already leased, so someone claiming to have a better offer at this point is of not any significance. Just my 2 cents.......
I received a lease from Diamond out of the blue iast week; i have a lease offer that was sent to me from McDonald that I investigated but haven't signed. Diamond offering essentially the same as McDonald (which seem suspicious to me) except it is $150 bonus/acre 4X4 with 16% royalty. I did get a bank draft with Diamond. My mineral rights are in Township 19S Range 51 west of the 6pm whatever that means. I have been reading the comment page for some time, and I believe that there was a mention of vertical wells being drilled that were producing 100/200 barrels/day. I have no idea if that is near me. McDonald told me that they hadn't drilled any wells yet; they are in the early stages of obtaining leases. I worked briefly for a GeoPhysical Co in Montana in the 60s and they were doing exploratory work then, so my question is has there been any exploratory work done in Kiowa County? I don't want to sign with a company that isn't going to develop the oil/gas resources, not with the price of oil what it is and the fact that I was told by my aunt years ago that gas was discovered on our land but never developed because of the cost of gas at the time.
Richard.... I don't know if there has been any exploratory work done... I have been told Pioneer Natural Resources (Diamonds client) is getting drilling permits now... so hopefully soon some drilling will start. Not sure your background on leasing... but concerning McDonald.. see my March 27th post in this forum.
Seems like the activity has been going in spurts. Any rumors of when companies might actually start drilling? I have heard that this time of year is when a lot of activity occurs, but not much going on (that I have seen online) in the way of companies getting new permits.
I had offers from McDonald and Diamond (both about the same). I signed with Diamond because the landsman told me that Diamond would be drilling in September. McDonald told me that they were in the early stages of obtaining leases.
If you mean Diamond Resources, to the best of my knowledge they are not drillers, they are a land company that has never drilled a single well, but the are probably selling your lease to a bigger fish who can drill.
Yes, that is correct Diamond Resources is just a broker. I have done leases with them for property in ND and their client then was Continental Resources (driller) and in Kiowa county, here Diamond's client is Pioneer Natural Resources. In my experience it is extremely rare to deal directly with the drilling company. I did once in NM with Chesapeake, but even then for the paperwork they still farmed it out to a broker. I don't think drilling companies want to get directly involved in the work of tracking down individual land owners and doing all the title research work with often very fractured mineral ownerships.
I received an offer from Diamond for $150 per acre, 4 and 4 and15% but think offer is a little low plus it is not a Lessor friendly lease. I would like to require a bond to cover expense of restoration at end of lease but do not know how large the bond should be to fully restore land to original state. Does anyone have any information about this?
Is anyone being contacted by a landman about leasing? I am trying to learn of leasing activity in Kiowa, specifically in the SW corner. I received a blind call from a landman working for Arapahoe that expressed interest but he did not follow through with a lease proposal. I assume Diamond is still active. See my offer below. I have not responded to Diamond as yet.
I inherited some mineral rights on some property from my grandparents. How can I find out where Township 18 South, Range 52 West of the 6th P.M., Section 15 : N1/2SE1/4 is located in Kiowa County, CO? Is there a web site or link anyone can give me? Thank you much.
PNR has 5 permits in Kiowa, Diamond has stop seeking leases for now. I was in Eads last week and there was only a single independent land man currently working at the courthouse. All others have pull out for now.