My family and I have recently been contacted by Central Montana Resources regarding leasing the mineral rights for Section 19, Township 12N, Range 35E in Rosebud County. Has anyone else been contacted recently by them or any other company? Is there any activity going on close to that area?
Leasing has been active in northern Rosebud & southern Garfield counties for about the past 18 to 24 months. Though the area is unproven so lease terms offered are quite low. Prior to any drilling the offers I've heard ranged from $10 to $35 per net acre with the royalty offered at 1/8th up to 3/16th on the high end. I believe recent BLM leases in the area brought up to $45 with 1/8th royalty.
In your area specifically, on 9-27-11 Central MT Resources began drilling a well in that same township (Section 5). The well is still in confidential status and it may be a couple more months before they're required to report results. So publicly it's unknown if that well will be producing or not.
Glenda, your minerals are only about 3 miles south of that well. As a result, it is a very positive sign if they "recently" contacted you to lease. Whether their well is a producer or not, they saw something they liked or they wouldn't offer you a lease at all. If you don't mind posting it, what terms did they offer?
Hi, I have a question. How does one find out if oil is being produced? If a company has drilled and found oil on land where they leased my oil and mineral rights, do they contact you right away? I am in Township 10 and 11N. Thank you! Dianne
Dianne,
No, they don't contact you right away. If it's not still "confidential" you can look at a well's production via the State's website www.bogc.DNRC.mt.gov
After a well begins producing it might be up to six months before you're notified by the operator. That "notice" will be when a Division Order is sent to you. This specifies your share of the production (your "decimal interest"). You should review it to confirm it's correct, then sign and return it to the operator.
The operator will begin sending royalty payments based upon your decimal interest. It may take another month or two after returning the Division Order before your first payment arrives. Consequently, that first royalty payment will be far larger than any later payments. That is because the first check can represent six to eight months worth of production, while later checks typically should represent a single month. Hope this answers your question.
They offered $25 per acre and 1/8 royality. Since we are new to this, didn't know whether to contact a n attorney to go over the lease or even if this was a reasonable offer.
Eastern MT said:
Leasing has been active in northern Rosebud & southern Garfield counties for about the past 18 to 24 months. Though the area is unproven so lease terms offered are quite low. Prior to any drilling the offers I've heard ranged from $10 to $35 per net acre with the royalty offered at 1/8th up to 3/16th on the high end. I believe recent BLM leases in the area brought up to $45 with 1/8th royalty.
In your area specifically, on 9-27-11 Central MT Resources began drilling a well in that same township (Section 5). The well is still in confidential status and it may be a couple more months before they're required to report results. So publicly it's unknown if that well will be producing or not.
Glenda, your minerals are only about 3 miles south of that well. As a result, it is a very positive sign if they "recently" contacted you to lease. Whether their well is a producer or not, they saw something they liked or they wouldn't offer you a lease at all. If you don't mind posting it, what terms did they offer?
Glenda, since you're new to this an attorney is probably a good move. Though the size of your interest (net mineral acres owned) is a factor. If your interest is large by all means get a MT attorney who handles oil & gas. Yet if you owned 40 net acres, at $25 per acre you'd receive $1000. In which case attorney fees might gobble up all that or more. Either way read as much as you can about leasing. This site and several others have a wealth of info to help you understand the basics of a lease and what to watch out for in the way of pitfalls.
If you are interested in leasing your minerals, I'd share this advice on their offer of $25 with an 1/8th;
In this day and age, 1/8th (12.5%) royalty is too low. Ask for 3/16th (18.75%). Then try to hold firm on at least 1/6th (16.66%) for the royalty. Central MT Res. (and several others) have leased most nearby acres with 1/8th royalty, yet I'm confident you can get them to come up from that (at least slightly).
As for a bonus amount, $25 per acre is also too low. Since they just drilled near you, their request to lease indicates they see something promising. However the area is still unproven so it's hard to say what's realistic. I'd start by asking for $75. You'll quickly learn how interested they are. If you own enough acres they may agree to it. If not, they should meet you somewhere inbetween. As far as I've seen $45 to $50 is the top end for now. Though they'll want to come down from wherever your counter begins. Hence asking $75, so you don't start at $45. Hope this helps. Good Luck to you (and CMR as I hope their Posideon well turns out to be a good one).
Thank you Eastern Mt for your very helpful information! I have looked all over the link you sent but cannot find where to click on to find out about production. Can you send me the direct link to that site? We are new at all of this so greatly appreciate all your postings! Dianne
Dianne said:
Hi, I have a question. How does one find out if oil is being produced? If a company has drilled and found oil on land where they leased my oil and mineral rights, do they contact you right away? I am in Township 10 and 11N. Thank you! Dianne
Thank you so very much for all this information.I agree an attorney is the route to go and should be money well spent. I have been trying to do as much homework on this as possible before signing anything. Thank you again. Glenda
Eastern MT said:
Glenda, since you're new to this an attorney is probably a good move. Though the size of your interest (net mineral acres owned) is a factor. If your interest is large by all means get a MT attorney who handles oil & gas. Yet if you owned 40 net acres, at $25 per acre you'd receive $1000. In which case attorney fees might gobble up all that or more. Either way read as much as you can about leasing. This site and several others have a wealth of info to help you understand the basics of a lease and what to watch out for in the way of pitfalls.
If you are interested in leasing your minerals, I'd share this advice on their offer of $25 with an 1/8th;
In this day and age, 1/8th (12.5%) royalty is too low. Ask for 3/16th (18.75%). Then try to hold firm on at least 1/6th (16.66%) for the royalty. Central MT Res. (and several others) have leased most nearby acres with 1/8th royalty, yet I'm confident you can get them to come up from that (at least slightly).
As for a bonus amount, $25 per acre is also too low. Since they just drilled near you, their request to lease indicates they see something promising. However the area is still unproven so it's hard to say what's realistic. I'd start by asking for $75. You'll quickly learn how interested they are. If you own enough acres they may agree to it. If not, they should meet you somewhere inbetween. As far as I've seen $45 to $50 is the top end for now. Though they'll want to come down from wherever your counter begins. Hence asking $75, so you don't start at $45. Hope this helps. Good Luck to you (and CMR as I hope their Posideon well turns out to be a good one).
Glenda Fillenworth said:
Thank you so very much for all this information.I agree an attorney is the route to go and should be money well spent. I have been trying to do as much homework on this as possible before signing anything. Thank you again. Glenda
Eastern MT said:Glenda, since you're new to this an attorney is probably a good move. Though the size of your interest (net mineral acres owned) is a factor. If your interest is large by all means get a MT attorney who handles oil & gas. Yet if you owned 40 net acres, at $25 per acre you'd receive $1000. In which case attorney fees might gobble up all that or more. Either way read as much as you can about leasing. This site and several others have a wealth of info to help you understand the basics of a lease and what to watch out for in the way of pitfalls.
If you are interested in leasing your minerals, I'd share this advice on their offer of $25 with an 1/8th;
In this day and age, 1/8th (12.5%) royalty is too low. Ask for 3/16th (18.75%). Then try to hold firm on at least 1/6th (16.66%) for the royalty. Central MT Res. (and several others) have leased most nearby acres with 1/8th royalty, yet I'm confident you can get them to come up from that (at least slightly).
As for a bonus amount, $25 per acre is also too low. Since they just drilled near you, their request to lease indicates they see something promising. However the area is still unproven so it's hard to say what's realistic. I'd start by asking for $75. You'll quickly learn how interested they are. If you own enough acres they may agree to it. If not, they should meet you somewhere inbetween. As far as I've seen $45 to $50 is the top end for now. Though they'll want to come down from wherever your counter begins. Hence asking $75, so you don't start at $45. Hope this helps. Good Luck to you (and CMR as I hope their Posideon well turns out to be a good one).
Even though I have been contacted by a landman working for Central Montana Resources, has anyone heard of contacting a different landman to create competition and negotiate for a better lease in that fashion? So far, the attorneys contacted haven't seemed interested.
Eastern MT said:
Glenda, since you're new to this an attorney is probably a good move. Though the size of your interest (net mineral acres owned) is a factor. If your interest is large by all means get a MT attorney who handles oil & gas. Yet if you owned 40 net acres, at $25 per acre you'd receive $1000. In which case attorney fees might gobble up all that or more. Either way read as much as you can about leasing. This site and several others have a wealth of info to help you understand the basics of a lease and what to watch out for in the way of pitfalls.
If you are interested in leasing your minerals, I'd share this advice on their offer of $25 with an 1/8th;
In this day and age, 1/8th (12.5%) royalty is too low. Ask for 3/16th (18.75%). Then try to hold firm on at least 1/6th (16.66%) for the royalty. Central MT Res. (and several others) have leased most nearby acres with 1/8th royalty, yet I'm confident you can get them to come up from that (at least slightly).
As for a bonus amount, $25 per acre is also too low. Since they just drilled near you, their request to lease indicates they see something promising. However the area is still unproven so it's hard to say what's realistic. I'd start by asking for $75. You'll quickly learn how interested they are. If you own enough acres they may agree to it. If not, they should meet you somewhere inbetween. As far as I've seen $45 to $50 is the top end for now. Though they'll want to come down from wherever your counter begins. Hence asking $75, so you don't start at $45. Hope this helps. Good Luck to you (and CMR as I hope their Posideon well turns out to be a good one).
Glenda, I replied to your post yesterday but I don't see it here, so I will repost. If you are approached by Central Montana Resources, be very very careful. I'm not sure if 1st, they have the resources to bring in a well, and 2nd, get a very GOOD oil and gas attorney. They have leased 36000 mineral acres from us with horrible terms, and the lease looks like it is as tight as a drum for them. We own the mineral rights where the Posiedan well is located. All that is there is a metal pipe in the ground. No equipment, and no permits for any fracking etc. Central Montana Resources has the one well(Posiedan) on section 5 12-N 35-E. and the Zeus well on 11n-34 e, sec 13.I believe these were both test wells and nothing has been reported. Cirque drilled Rock Happy and it has reportedly brought in about 200 bbl per day for the 6 days in February. Havn't heard anything more. Fidelity has applied for 17 temporary spacing units including townships 11n-35-e,10-n 33-e,9-n 34- e,10-n 33-e. about 50 % of Cirque has been purchased by Soltoil, the largest oil company in the world. (they are drilling in over 30 countries) I believe there is something good going to happen in that Heath formation especially with a very large international company involved. Think good thoughts!!!!
Beverlee, Yes let us all think good thoughts, I like your positive approach! Regarding Cirque Resources selling an interest to Soltoil, I've not heard of a company by that name nor does a search turn up anything on "Soltoil". Might that have been a typo, or do you know where you read about Cirque's sale? Thanks in advance, and I will try to stick with good thoughts!
Sorry it was a BIG type o. I was using my tiny little keypad and didn't correct the spelling. It is actually Statoil out of Norway. It was posted in the Bloomberg Business Week on May 11th I believe. I think an article also appeared in the Denver Post. ( We live in Co.)
If you google Statoil and Cirque, you will be able to see several articles regarding the sale. I don't know how many acres Cirque had but according to the article Statoil purchased about 50%. Sorry for the misspelling!!! (I won't use the tiny keypad unless I'm wearing my glasses! ha.
Statoil invested several billion (actually 4.4) to get involved in the Bakken shale. Again, they are the largest oil company in the world. .
Thank you. I'll try a search on them to read about their deal. A Joint Venture with Statoil is a very positive move by Cirque. By itself Cirque is a rather small company (as are just about all the players in the area). So it's crucial for them to find the capital to develop this play. Short of immediately hitting some big wells to generate their needed cash flow, a J.V. deal with larger firms is an effective way to get the cash to properly explore the acres.
I don't know precisely how many acres any of these companies leased, but I have a pretty good sense of which have put together the largest block of acres. Fidelity (MDU) has a presence down closer to highway 10/12. Though along either side of the Rosebud and Garfield county line, Central MT Resources, Cirque Resources, and Retamco (partnered with C. MT R.) probably have the lion share of acres leased. There are a handful of other players such as Endeavour Corp but I think to date all they've done is file for a few permits. So I believe the introduction of major oil companies, or even larger indepedents, is a positive sign for this area.
Eastern Montana, just google Statoil and Cirque, The President of Statoil issued a statement from Norway on the acquisition of mineral rights from Cirque. He said it was a very small beginning, but it was reported they bought about 50% of their leases. There are several articles on the merger via the web.
Things will happen but I don't expect big things until probably the middle or end of 2013.
Just wished my dad would have waited before signing the secret lease!!! (He wouldn't even tell us about it until after he signed.) Now he doesn't even know who he signed with, how much or even when! (The lease was actually signed on Oct. 1, 2007, and he was almost 90 years old!)
Hi, reviewing my mother's lease from 3 years ago, she got 15% royalty. The first of her leases have been drilled and we are working to clearing up some title issues, but they told us they have permitted another well that we have another small interest in. Things are picking up. Our well is with Fidelity.
I am new to the forum and mineral rights. I would like to know a reputable company that would lease my mineral rights.
Joe, I'm happy that your leases have been drilled. How close are you to T10 and T11 R 33E?
Joe Jackson said:
Hi, reviewing my mother's lease from 3 years ago, she got 15% royalty. The first of her leases have been drilled and we are working to clearing up some title issues, but they told us they have permitted another well that we have another small interest in. Things are picking up. Our well is with Fidelity.
Has anyone heard of Energy Leasing Services located in Belgrade, MT ?
No, Sean, I haven't. Dianne