Hello! I have 100 mineral acres in this section. Lease expires 10/2013, and no current drilling activity, I am assuming it will expire with no drilling or producing wells, not much time left. Nearby sections 8 and 9 are heavy with production. Any ideas of what a fair lease per acre would be? I read an in earlier post that a individual back in 03/2012 signed for $550 per mineral acre and 19%, in Sheridan county. I appreciate any thoughts. Thank you.
Jeremy:
Do some research and learn the amount of production of wells within close proximity of your minerals. This is a major factor in the bonus/acre you will receive. Of hand, I would say that $500/acre average would be a starting point in negotiations but don't take the first offer. I would settle for no less than 20% royalty and limit the lease to 3 years with on extensions. Also, I would add a pugh clause in the lease as to protect the lower formations. These areas have various undeveloped zones and you never know what the future holds for some of these.
Hello sir! Thank you for your reply, and education! I will follow your advice! Thank you for the starting point, it is greatly appreciated! May your kindness return upon you!
charles s mallory said:
Jeremy:
Do some research and learn the amount of production of wells within close proximity of your minerals. This is a major factor in the bonus/acre you will receive. Of hand, I would say that $500/acre average would be a starting point in negotiations but don't take the first offer. I would settle for no less than 20% royalty and limit the lease to 3 years with on extensions. Also, I would add a pugh clause in the lease as to protect the lower formations. These areas have various undeveloped zones and you never know what the future holds for some of these.
Jeremy:'
Looking at the map, TAQA North USA has numerous wells to the South of your area, some producing from the Bakken and some from the Nisku formations. Vaalco Energy has a nice Bakken well to the West of your area. Looking at the whole picture, I will say that you should be able to negotiate a very good lease. My advice is not to top lease as you might be contacted over the next couple of months with top lease offers. Let your mineral lease expire as this will improve your negotiating power. By all means, don't get in a hurry.
I will move carefully!! Again, your advice is most appreciated! Take care!