I have been approached by EQT to sign a O&G lease in Proctor District for a fractional acreage. They are offering $2000 per acre & a 15% gross royalty. The lease is for all formations. Does anybody know what land in Proctor District has been leasing for lately? In 2023 $5000 per acre seemed to be the going rate.
This is their low end offer no doubt. In Grant I’m seeing 3000/ acre at 12.5% or 2000/ acre at 14%. With that said, these are going uncontested by uninformed mineral owners and can be much better. I don’t foresee 5000/acre though unless you take a big hit on royalties
What is “gross royalty?” Does that mean before any expenses and deductions?
Yes, that is before any deductions, but what that means still seems to be disputed by some of the Lessees. Overall, it’s better to have a Gross royalty percentage in your lease than a Net royalty percentage, all other things being equal.
@CarolNT43 in WV we often see two terms used, either gross royalty, or net royalty. Gross royalty usually pertains to royalties calculated prior to deductions which would be expenses incurred by the operator. Net royalties usually refers to the final amount realized by the operator
Thank you Nick-TBM and Heir1.
3000 per acre and 17% royalty if you can get it but stand your ground they want you to sell cheap so they can make a bunch more