gas lease

[Don Anderson]

Mom just emailed me and said that an individual or company was wanting to lease ground for possible oil or gas drilling. Ground is in the center of Kansas. What is a fair price for such a lease?

 

[Allan in NE]

Tell 'er to hang on to those mineral rights.....or tell 'em ya want a million dollars an acre per year lease.

Ya really gotta be careful.

Those jokers come in and "steal" the minerals for pennies on the dollar after ya sign one of those leases. Then everyone makes money EXCEPT the landowner.

Just my opinion,

Allan

 

[Anonymous-0]

Get a lawyer who is familiar with mineral, gas, oil leases !!!

 

[John T]

I cant give you the ball park price youre lookin for, but a client brought me one some time back for review AND THOSE MINERAL LEASES CAN BE TRICKY. Id also suggest you consult with a PROFESSIONAL LOCAL ATTORNEY experienced in mineral leases instead of tractor forum opinions, it may cost some bucks but it could save or make you bigger bucks down the road.

best wishes

John T

 

[elmersooner]

as others have said---get an attorney, also do not accept the first offer-ever. try to talk to neighbors that already have leases in effect and see what they did. my grandpa in law turned down more than 5 offers before they were even close.

 

[the tractor vet]

Around here they are at 6250 and we have heard that south of us they are toppen 8500 and acre with 24% ON THE GAS AND OIL

 

[oldironman]

It seems to me that if you don't lease the land that they will only drill on leased land down the road and take the oil and gas anyway.

 

[RayP(MI)]

Get yourself the best gas/oil lease lawyer you can to protect your interests. Pay them whatever they ask for their service. Gas and oil lease companies are amongst the slippriest, cheating lying, people on earth. They'll tell you anything to get your name on their lease. And cheat you in the process.

 

[PaGlenn]

Make sure they are not entitled to take other items like maybe stone dirt etc.

 

[GregCO]

Personally unless it involves a ton of money for her and the proposed drill area is in the middle of nowhere where she will not be bothered by the activity I would pass. The 5 acre lot I live on had a lease on it when I bought the land and my in law's owned the minerals. The lease was 30 years old at the time and the lease was drawn up when my lot was still part of an entire section. Figuring with the age of the lease and the size of the lot now that it would never be drilled. Guess what? I now have a well head 300 feet from my back door. I tried to head it off when they decided to drill and had I built my house another 50 feet back on the lot they would not been able to. I lost the use of half of my pasture space due to having to give access to the oil company at will. The last time they came out to rework the well I was literally standing on the edge of the platform to feed animals as they had so much equipment where it was not supposed to be that the pen was blocked. I screamed like a smashed cat, but they don't care once they have access. As a land owner I get nothing in return. I was hoping for a gas tap, but was told that they can't allow them anymore.

Greg

 

[LAA]

The lease should be for a specified time period, normally 3 years, the lease should specify the depth to which the leasers would have the right to drill, the lease should specify the percentage or ""share"" to be paid the land owner if a well is drilled on property directly owned by the land owner and if a well is drilled within the same section, which will be a smaller ""share"". There should be language addressing returning the surface land to its original condition after drilling operations and probably some warranty language regarding toxic waste or hazourdous waste and spills. Whether or not you can negotiate more money per acre than is offered depends on drilling activity in your area, the size of the tract of land and road access. There are many horror stories but for the most part it is free money. Ask locals who have dealt with the same company. All lease agreements are public information and filed in your local courthouse, you can find out what the going rate per acre really is.

 

[2x4]

follow advice below & get specialist lawyer. Companies have been writing those leases with the best legal minds they can buy for 120 years & they know everything & you know nothing.

 

[Anonymous-0]

It's highly possible there are several people on the forum that have mineral leases on their land and could offer some sound advice.

 

[snoopnc]

...and cell phone companies rank right in there with their tower space leases.

 

[big jt]

I have personal exp with this up in NW North Dakota. Not in Canada but you can see it from there. Heard anything bout the boom in Willeston?
It is a bit diff up there cause this is where they need to drill sideways and then frac the well to release the oil.

Up till a couple years ago we were getting diddly squat (memory serves $20 a acre) cause it was divided into so many parts it was ridiculous. One cousin started the ball rolling to set up a trust so we had some negotiating power. Bout half the land is signed into the trust and we got a lease for $525 per acre and 20% royalties. Since we have signed up we have been offered more.

What I am getting at as others have said get a good mineral rights lawyer to negotiate your lease.

 

[John_PA]

I hate to be an "expert" on anything. I hate to think I know more than anyone, but I read all these posts. from someone who has an active lease on a "hotspot" I just want to give you a modicum of advice...

For starters:

What does the lease specify? Utica shale? Mississippian? Marcelles? other?

Know the geo formations below the property. You can research this. It will give you power. Next, after you know exactly what they are drilling for, specify that in the lease. If they are after a certain type of shale, then you will know what to do. Without getting extremely specific, what type of shale are they targeting, and what was teh per acre lease amount? I hate to tell you but, you could be sitting on millions. Without giving too much away, I just want to say that in a certain area, there are those making $700,000 a month in royalties from 18%. The whole thing revolves around what type of shale, and the depth in that part. Now, they know your depth. they probably already did a geo survey with thumpers.


I can't get too specific, but I can say that you need to contact others in the area. Most offers you get will be for 50% or less than what their cap is. What was teh per acre amount they offered? Some guys are getting $10,000 per acre, some are getting $20. it varies... I won't say what I got, but, it was enough. It took some haggling. remember, they sign into units. So, if you are less than 1280 acres, you will be combined into a unit with neighbors. If you own more than 1280 acres, you are a unit until itself. That holds more power, but never accept a first offer. Be gracious in your allowance of land, but leave room for personal profit. The more enticing your land is, the better the chances they will offer more. Give them rights to tear it up during drilling, and it will pay off. If they can get an entire unit drilled in one shot, you will make out adn so will they.

I could go on forever on this topic. Like I said, I live near a hotspot for the gas drilling. I know a lot about this, but, I'd like to talk more in private, not on a searchable forum.

 

[Anonymous-0]

I guess the oil and gas industry is the most misunderstood business in the world. It has such wide and varied differences even from just one field to another which sometimes are only a few miles away. Now that oil and gas leases have become so common in the news its no wonder. The only way to really understand what is being paid and for what is to ask questions from others in the area. It does no good to get information from anyone other than around the lease area. I would not have your mom do the leg but instead you should call around. Talk to the landman or compnay that contacted her. Ask them for other royalty owners names in the area they've signed up. They're not like used car salesmen and they will share most of their information with you. Then call other land/leasing companies in the area and talk to them. They get calls like yours everday! All you need is the local knowledge to understand better what's being paid and for what. A few phone calls and you should have a good picture. You can also contact the regultory agency for the state. They might not tell you prices but they can give you losts of information on the rest and I know they will help you with some other numbers to call. You can learn alot by just Google searching too. Good Luck!

 

[scotc]

They are doing the directional drilling and hydraulic fracing on the Marcellus in PA, too. Versus the explosives that they used to use back in the old days. They've been using hydraulic fracing for years, why the sudden interest, I don't know, unless it's the amount they need for each well.

And that guy in Colorado who could light the water coming out of his faucet who blamed it on the new gas well- it was his water well, it was drilled through a pocket of natural gas.

 

[John T]

Thanks, Probably so and since leases can be so different and if different states are concerned and based on my experience with them from an attorneys standpoint, I still in good faith advise him to seek local professional advice in addition to what he may or may not learn here.

Take care and Merry CHRISTmas

John T

 

[big jt]

I think the cause for sudden interest is $3.00 gasoline.

 

[jackinok]

just a tip,about 95% of of the oil and gas leases are never drilled on, so dont go running to the bank just yet. Its simply an oil company reserving the right to drill there if anyone does. surface damages ,production deals and all that is a total different matter. A lease give them no rights whatsoever to do anything on your land but reserve the right to be the one to drill if any drilling is done. nearly always they WONT be the ones drilling,and may have only a very small percentage of the final well. they cant drive across your pasture ,siesmograph,do any thing else,and chances are you may not ever even see them. do NOT let them come in and start drilling simply on the face of a lease. if they want to drill a well,thats when you want to have someone who knows the buisness advising you.dont even give them a key to the gate.they have no right to be there simply because they have the lease on your place,theres far more to it than that.like someone else says,the amount of the lease varies some widely that it would be nearly impossible to say. just remember a oil or gas lease, is NOT a production agreement,they have to pay for surface damages and all the rest if they do drill.

 

[slim]

Good advice. Know what you have. You wouldn't buy or sell a tractor without knowing a little something about it. My experience is that on our land, ever so often someone wants to lease the mineral rights for a few years. Nothing is ever done with it and the lease expires until many years later. Been that way since my parents bought the land in 1951. There's definitely oil there but it's deep and expensive to get.

slim

 

[big jt]

In case I was the one being refered to, I want to clarify.

Not claiming to be a expert just saying I have personal experience.

What I was trying to do was back up others who had suggested getting good representation. In addition have said representation negotiate the lease. Yes I do mean a attorney.

The in's and out's of the situation I am involved in are way more complicated than can be explained here.

jt

 

[Anonymous-0]

Having an experienced attorney is great advice but the comment,"instead of tractor forum opinions" could be taken the wrong way. There's a lot of very knowledgeable people on this forum for just about any situation that comes up. Often experience counts more than anyone's opinion including so called experts.

 

[scotc]

I know in an offshore expirimental well that they've gone a couple miles miles horizontally from their start point. Read it in a trade magazine when I was up in Tioga (about 45 miles N and E from Williston) last fall.

 

[Ron in NS]

Just don't let them frack!!! You'll be sitting on worthless land for ever after.