Lease offer

Montana Mineral Rights Roosevelt County, MT
1

Hi - we've received a lease offer from Herco out of Billings. 28N/56E. Offer is only $100 lease bonus per acre and 16% royalties - 3 yr with additional 2 yr option @ $200/acre. Anyone else heard from Herco? How does the offer sound?

2

Not a good offer at all. I would request an AFE and get your cost to participate in well. Otherwise, if they are just leasing to tie up the property, I would not entertain that offer at all.

3

Are you familiar with the Mt DNRC Webmapper? It may not give you the answer to your question but it may provide some very good datum points, activity, production in a five mile radius of your acreage.

Other than that I would lean towards agreeing with Pam, exception possibly if the 16% is with absolutely no deductions other than taxes.

4

Depends on where it is at and active wells around it! We just leased for $1500 and 20%.

5

Sheralyn:

Take the advice from above replies, bad offer. Looking at the GIS map, Statoil Oil and Gas has two Bakken wells in Sections 8 & 17 and Sections 25 & 36. One was drillled in 5/10 and is a decent well since the decline curve on production and the other drilled in 2/13 which remains a good producing well. I am not familiar with Herco and would guess that this is more of an investor operation trying to secure minerals for future profit. If I leased to them, I would add a "pugh clause" excluding the Bakken formation. Another great source of info for you is to contact Gary Hutchinson at 303-279-4113. He is extremely familiar with the area and could advise likewise.

6

Sheralyn:

Just yesterday (6/3), Oasis leased an entire section (28N;58E;Section 10) for $1500/acre. This area is somewhat close to your area so this may shed further light in regards to your question.

7

Thanks for your info, Charles. I really appreciate it!

charles s mallory said:

Sheralyn:

Just yesterday (6/3), Oasis leased an entire section (28N;58E;Section 10) for $1500/acre. This area is somewhat close to your area so this may shed further light in regards to your question.

8

Thanks for your reply. May I ask where your rights are located?

Dctex99 said:

Depends on where it is at and active wells around it! We just leased for $1500 and 20%.