We own 1/2 interest of mineral rights to 1,000 acres in Goshen County, Wyoming. We have recently been contacted to lease the land for 5 years at $10 per acre and 1/8 royalty. I have no idea if this is a fair value offer or not. Can anyone give me an idea? Thank you!
John,
It is encouraging to hear of some offers in Goshen County. I manage over 7000 acres there and as you probably know, location to and payment for proven reserves has everything to do with what is fair. In your case and if you are happy with $5000 of easy money, make certain that you understand every bit of fine print in the lease to know what the lessee will control, how it can control it and exactly for how long they will have it and for what minerals. Goshen is the site of some precious and base metals resources that are well documented so you don't want to compromise those rights if they exist. There have been some successful tests of the Niobrara Formation as well as other petroleum baring formations.
Personally, I would find a different way to earn $5000 now than using a "standard oil and gas lease" that would satisfy the offerer as well without loosing control forever.
Good luck and thanks for the post.
Thank you Gary. What type of things should I be looking for within the lease? We only have 1/2 interest and I recently discovered who the other co-owner is. I contacted them and learned they have already entered into an agreement with this company for their 1/2 interest which is unfortunate in that we collectively are not able to shop the market for the entirety. But still, it doesn’t force me to enter into the agreement if the conditions aren’t acceptable. I just want to obtain a fair market value for our interest and to have a reasonable lease in place. Any suggestions on who I could get to review the lease? Thanks!
HEY JOHN,
I've sent you a personal message and "friend request" so we can communicate directly. I'll be happy to tell you what I would do in your situation.