Share your experience and lease rates in the county by replying to this discussion. It will give everyone who visits an easy reference.
Good Idea, Thanks R. T. I don’t have a lease yet but was offered 300.00 per acre for three years and a 3/16% royalty. I am new to this but it sounds low.
Lora,
Our lease was made 3 years ago and it is 3/16 royalty and we only got $250.00 an acre. However, depending upon where you are I have heard of people in Woods getting up to $600 an acre.
Just FYI: I know you don't even have a lease yet, but if you do get one you might want to know how the royalty is really calculated. Something I never realized is that the 3/16th becomes much less when you are in a spacing unit (pooled)... There is a formula for figuring out exactly how much you will really receive if there is production.
Your number of acres divided by the entire number of acres for the unit, times your royalty percentage (3/16). If you are a co-owner then you would also have to times that number by your portion.
For example my sisters and I own 80 acres and our spacing unit includes 640 acres (an entire section). There are 5 of us so my portion is 1/5th or 20% ...so
80/ 640 = 0.125 x 0.1875 (3/16)= 0.0234375 x 0.2 = .0046875, which is what my share for each acre is on the Division Order. A lot less than 3/16 (0.1875). Even if I was the sole owner it would still only be 0.0234375.
And... don't forget that taxes are taken out and if your lease includes an allowance for any costs of production to be taken out your share becomes even smaller!!!
Joni
It's a smaller number but, over a bigger area ;0)
I have just joined this group and have spent the evening reading posts and comments. I made a lease for $500 per acre with 3/16% royalty in October 2011. A couple of weeks ago I received an offer from another company (not the lessor) to purchase my mineral rights to a portion of my holdings. My sister who lives in Wyoming said "never sell mineral rights." I am now trying to educate myself in a field I know nothing about!
your lease bonus & royalty are always relative to the area & that area changes as the play develops. Could go up, could go away.
I assume you are not the surface owner so, the minerals are also relative. I always heard "never sever minerals from the surface unless you dislike your buyer". If cash is king, minerals are cash.
To tell the truth, I don't know about the surface rights. This holding was given to several grandchildren a long time ago and my husband received very small royalty checks over the years. He sort of pooh-poohed the whole thing as being worthless. He has passed away and there are no records that he had to show what the holdings actually are. How do I go about finding out what exactly is involved in this small holding?
Nick said:
your lease bonus & royalty are always relative to the area & that area changes as the play develops. Could go up, could go away.
I assume you are not the surface owner so, the minerals are also relative. I always heard "never sever minerals from the surface unless you dislike your buyer". If cash is king, minerals are cash.