Hello everyone! My family currently owns mineral rights in Buttonwillow, CA. It is over 400 acres. I was wondering what a fair lease would be? Hopefully $50 per acre with 3/16 royalty. I am not sure if that is enough acreage to receive that type of lease. Any help with this would be appreciated. I have contacted CRC to see if they are interested.
Hi Dustyn:
You do not indicate what percentage you own in the 400 acres, but you certainly have a lot more negotiating power if you have 100%. At the current price of oil, unless you have 100%, it is unlikely that you will get a lease at $50 per acre with a 3/16 royalty, but you can always ask. Of course, if no one is currently interested in leasing then any lease is better than nothing unless, of course, you own the surface and then you may be more interested in a surface use agreement than in what your mineral interests will bring in.
Good luck!
Leasing activity in Kern County is completely dead right now. Nobody is even spending money to develop property they hold. Presumably that will change in a year or two; it always does. For a wildcat area like Buttonwillow, you are probably a little on the high side, but that's not a bad place to start. I would not bother contacting oil companies; they know where to find you. Your time might be better spent examining your mineral title to make sure there is no "hair" on it, or that some old lease which was never quitclaimed is clouding your title.