Use this post to share and discuss your lease offers in Dunn County, ND. The more we know about what is being offered the better decisions we'll all make. Share your bonus, royalty rate, and any other provisions you were able to negotiate.
Regards,
Here is a history of the trend we have seen
2006 $75 bonus 15% royalty
2008 $200 16.7%
2011 $500 18%
2008 $200 18.5%
Latest mineral rights offer to lease mineral rights in Dunn county.
I just asked for 20% & $500 for mineral rights on Section 23, Township 145 North, Range 95 West. I was offered $300 per mineral acre & 100% bonus money "up front". Sounding like a typical landman, he tried to tell me that it was a gamble to top lease since it will probably be drilled on before my current lease is up, in September 2012. I told him I wouldn't consider anything less than 20% royalty interest & $500.mineral acre. he said he'd call me back. Think the price will go up as time goes by since companies have drilled wells all around the area. He also wanted to know where I was living at now. I think he was trying to get a feel for how much I knew about what was going on in Dunn County. I let him know I have contact in Williston & know people who work for Diamond Leasing, although I don't know if they are doing any leasing in Dunn County.
Kay Maas said:
Latest mineral rights offer to lease mineral rights in Dunn county.
I just asked for 20% & $500 for mineral rights on Section 23, Township 145 North, Range 95 West. I was offered $300 per mineral acre & 100% bonus money "up front". Sounding like a typical landman, he tried to tell me that it was a gamble to top lease since it will probably be drilled on before my current lease is up, in September 2012. I told him I wouldn't consider anything less than 20% royalty interest & $500.mineral acre. he said he'd call me back. Think the price will go up as time goes by since companies have drilled wells all around the area. He also wanted to know where I was living at now. I think he was trying to get a feel for how much I knew about what was going on in Dunn County. I let him know I have contact in Williston & know people who work for Diamond Leasing, although I don't know if they are doing any leasing in Dunn County.
Amy said:
We got $1500.....
Where is your land located? What Township, Range & Section?
Amy said:
Amy said:We got $1500.....
I was offered $3,000 acre bonus and 20% royalty last year in early December for my acres in T149 R93 Sec 24, T148 R93 SEC2 and SEC 6.
We inherited 13.3 acres of mineral rights in Dunn County, Township 146N, Range 95, West of the 5p.m.
A purchaser has contacted us to offer to buy, (not lease), our interests. Can anyone tell me how much per acre this interest might be worth? We have no experience at all, but do want to get a good deal. I see that you all are leasing your interests, but this company wants to buy ours outright? Please help!
Thank you very much.
If I were you, I would under NO circumstances sell my mineral rights. I don't know what they offered you, but I've turned down $1500 per mineral acre many times. They are drilling around your area & they have yet to reach a "dry hole". I receive at least that much per MONTH is royalty income & my payments are split 5 ways! Be patient. I know whatever they offer you is tempting, especially in these economic times, but just hang on. They are counting on needing the money & not being aware of what's going on.
Darlea Feldt said:
We inherited 13.3 acres of mineral rights in Dunn County, Township 146N, Range 95, West of the 5p.m.
A purchaser has contacted us to offer to buy, (not lease), our interests. Can anyone tell me how much per acre this interest might be worth? We have no experience at all, but do want to get a good deal. I see that you all are leasing your interests, but this company wants to buy ours outright? Please help!
Thank you very much.
Darlea, I looked on the GIS server map and I can't see a single section that does not have a well or a leg in the whole township. This means you already have a well, which at the very least is an enviable bargaining position. It is also the probable reason the landman asked where you live now, to see if they could get you to sell before you find out about the well. You didn't give the section/s but I saw no sections that did not have a well or the leg of a well. Check for yourself, go to the NDIC Oil and Gas Division website and select GIS map server, then select find section. Input your legal description at the bottom and click on the zoom to section button. If there is a black dot with a line off of it or just the line in your section, you have a well already. Make the most of a great bargaining position. If you need help getting the production figures for your well, let me know, in the open or send me a friend request. The more you know the better deal you can make. The area looked really good, so good it looks like they are already putting in additional wells to drain the spacings rather than just 1 well to hold all the acres by production. You make your own luck in the mineral rights business by being informed. I wish you the best of luck.
Darlea Feldt said:
We inherited 13.3 acres of mineral rights in Dunn County, Township 146N, Range 95, West of the 5p.m.
A purchaser has contacted us to offer to buy, (not lease), our interests. Can anyone tell me how much per acre this interest might be worth? We have no experience at all, but do want to get a good deal. I see that you all are leasing your interests, but this company wants to buy ours outright? Please help!
Thank you very much.
Things seem to have slowed down a bit for new leases. We are in 144 92…lease just expired…Anybody know anything about this area…we may be out of the “sweet spot”… Thanks
Are there any new/renewal lease in the lower SE Dunn Cty this year? Seems Empire & Hess is active in area.
I have been offered 1000 an acre for my minerals with 18.75 royalties. Is it possible to get 20% on the royalties. Jackie
Jackie, 20% has become common but they will probably scream and say they can't give you 20%. All part of negotiation. If I really wanted 20% I would tell them so and politely tell them to let you know when they agree and not before, make your goodbyes and hang up. If you talk to them they probably will tell you you will be force pooled which sounds scary but really isn't. Then the untruths can start like , you get nothing until your part of the well and penalty are paid for, the penalty is 200% to 300% yada yada yada, not true and in my opinion, not worth listening to. I do recommend that you be persistent because you are going to be surprised how little you get to keep even if you get 20% royalty.
why do you get to keep so little
r w kennedy said:
Jackie, 20% has become common but they will probably scream and say they can't give you 20%. All part of negotiation. If I really wanted 20% I would tell them so and politely tell them to let you know when they agree and not before, make your goodbyes and hang up. If you talk to them they probably will tell you you will be force pooled which sounds scary but really isn't. Then the untruths can start like , you get nothing until your part of the well and penalty are paid for, the penalty is 200% to 300% yada yada yada, not true and in my opinion, not worth listening to. I do recommend that you be persistent because you are going to be surprised how little you get to keep even if you get 20% royalty.
Jackie, you give up 100% of the oil and gas for the bonus and a promise of royalty, lets say 20% of production. There is 11.5% production and severance tax combined -2.3% off your royalty of 20% ND state income tax of possibly 4%, federal income tax and any deductions your lease allows the operator to deduct from your royalty, transport/trucking the oil, gathering, charging you for a pipeline you don't own any part of, separating, compressing, dehydrating gas which can be a huge part of your gas royalty. Alot of gas gets flared off anyway for which you receive nothing. If you negotiate a 20% royalty I think it would be realistic that you will be able to pocket 50% to 60% of your gross royalty as figured by any of the online calculators.
In the lease, the large print giveth and the small print taketh away. Actually it doesn't have to say the operator can make deductions from your royalty, it's just assumed that he can if the lease does not contain the legal wording that the operator can't. You also may want language so the operator can't sell to himself/affiliate at half price and figure your royalty from that half price. If not all of your acres are in the same spacing you need a pugh clause so not all of your acres can be held by production while you are only being paid royalty on a few acres, the lease will eventually expire on the unproductive acres. If you own surface, I wouldn't grant the use of water or easements in the lease. The oil companies have been busy little beavers for over 100 years figuring out ways to make or save more money in a lease. It's probably best to have a lawyer look over your lease if you can find one who will actually look it over and explain it to you. If a lawyer just looks the lease over and hands it back saying you can sign it without making suggestions, the money you spent on the lawyer was wasted. It's legal to agree to almost anything, you can be sure the lease is legal because the oil company is unlikely to put themselves in that position, you need a lawyer to explain how a clause/language is not in your best interest and what affect it will have. If I just had a half acre I would probably rather sell it than lease it, saving myself headaches. Good luck.
Thank you for all your information. you have given me alot of food for thought. Is there any truth to the statement that we can be brought into litigation with the operator for his mistakes without a lease. Thanks Jackie
r w kennedy said:
Jackie, you give up 100% of the oil and gas for the bonus and a promise of royalty, lets say 20% of production. There is 11.5% production and severance tax combined -2.3% off your royalty of 20% ND state income tax of possibly 4%, federal income tax and any deductions your lease allows the operator to deduct from your royalty, transport/trucking the oil, gathering, charging you for a pipeline you don't own any part of, separating, compressing, dehydrating gas which can be a huge part of your gas royalty. Alot of gas gets flared off anyway for which you receive nothing. If you negotiate a 20% royalty I think it would be realistic that you will be able to pocket 50% to 60% of your gross royalty as figured by any of the online calculators.
In the lease, the large print giveth and the small print taketh away. Actually it doesn't have to say the operator can make deductions from your royalty, it's just assumed that he can if the lease does not contain the legal wording that the operator can't. You also may want language so the operator can't sell to himself/affiliate at half price and figure your royalty from that half price. If not all of your acres are in the same spacing you need a pugh clause so not all of your acres can be held by production while you are only being paid royalty on a few acres, the lease will eventually expire on the unproductive acres. If you own surface, I wouldn't grant the use of water or easements in the lease. The oil companies have been busy little beavers for over 100 years figuring out ways to make or save more money in a lease. It's probably best to have a lawyer look over your lease if you can find one who will actually look it over and explain it to you. If a lawyer just looks the lease over and hands it back saying you can sign it without making suggestions, the money you spent on the lawyer was wasted. It's legal to agree to almost anything, you can be sure the lease is legal because the oil company is unlikely to put themselves in that position, you need a lawyer to explain how a clause/language is not in your best interest and what affect it will have. If I just had a half acre I would probably rather sell it than lease it, saving myself headaches. Good luck.
Is there a cost to the mineral owner if the operator hits a dry hole if you are forced pooled?
r w kennedy said:
Jackie, you give up 100% of the oil and gas for the bonus and a promise of royalty, lets say 20% of production. There is 11.5% production and severance tax combined -2.3% off your royalty of 20% ND state income tax of possibly 4%, federal income tax and any deductions your lease allows the operator to deduct from your royalty, transport/trucking the oil, gathering, charging you for a pipeline you don't own any part of, separating, compressing, dehydrating gas which can be a huge part of your gas royalty. Alot of gas gets flared off anyway for which you receive nothing. If you negotiate a 20% royalty I think it would be realistic that you will be able to pocket 50% to 60% of your gross royalty as figured by any of the online calculators.
In the lease, the large print giveth and the small print taketh away. Actually it doesn't have to say the operator can make deductions from your royalty, it's just assumed that he can if the lease does not contain the legal wording that the operator can't. You also may want language so the operator can't sell to himself/affiliate at half price and figure your royalty from that half price. If not all of your acres are in the same spacing you need a pugh clause so not all of your acres can be held by production while you are only being paid royalty on a few acres, the lease will eventually expire on the unproductive acres. If you own surface, I wouldn't grant the use of water or easements in the lease. The oil companies have been busy little beavers for over 100 years figuring out ways to make or save more money in a lease. It's probably best to have a lawyer look over your lease if you can find one who will actually look it over and explain it to you. If a lawyer just looks the lease over and hands it back saying you can sign it without making suggestions, the money you spent on the lawyer was wasted. It's legal to agree to almost anything, you can be sure the lease is legal because the oil company is unlikely to put themselves in that position, you need a lawyer to explain how a clause/language is not in your best interest and what affect it will have. If I just had a half acre I would probably rather sell it than lease it, saving myself headaches. Good luck.
Jackie, they can place a lien against the production and only the production of your minerals, the minerals they evidently couldn't find to begin with. You would owe nothing out of pocket. Has anyone looked at inflation lately? If they come back and figure out how to make your minerals produce in quantity in 50 years after a dry well the money you satisfy the lien with will probably be the equivalent of toilet paper. Go non-consent in that future well and take your statutory 16% from the first barrel again.