Is this a good offer

I have an offer of 5,500 per acre and 20% royalty for 45 acres in Elk township Noble county.

Its a five year lease with a five year extension under the same terms.

Is this a good lease.  Thank you.

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Permalink Reply by Jason on December 17, 2013 at 2:15pm
Mickie - thousands signed for $1500/15%. Bar was set way too low. Best I've heard is $7k and 20% - 40 miles away. I agree with you.
Permalink Reply by Philip Brutz on December 17, 2013 at 2:20pm

Is that 25% gross or net?

Permalink Reply by Mickie Byrd on December 17, 2013 at 2:50pm

25% no deducts.  They started out here really low to. It will come up only when yall get together and demand it. The economics in the core areas says they will not leave you out, but they are very good at playing hard ball. I was offered a lease for 20% and have just stood my ground. They will call back.

 

Permalink Reply by Philip Brutz on December 17, 2013 at 3:01pm

How many acres did you lease?

Permalink Reply by WranglerRouser on December 18, 2013 at 10:26am

At a Landowners Leasing Group meeting back in October '13 at Salt Fork State Park we were told that the "break-even" point for the oil & gas companies was 68%.  I don't know if there is any truth to that number but thought I would share as an FYI.

Permalink Reply by Nancy LeNau on December 17, 2013 at 4:17pm

Mickie,  Thank you for all the information you have given to us from Texas !  It is Much Appreciated !

Permalink Reply by Mickie Byrd on December 18, 2013 at 2:31pm

Oh yea beware of Chesapeake they are biggest thieves out there.

 

 

 

Permalink Reply by Nancy LeNau on December 18, 2013 at 3:51pm

I agree 100 % !

Permalink Reply by Todd on December 18, 2013 at 4:11pm
I agree 12.5% - my HBP rate! Lol :)
Permalink Reply by Rick on December 18, 2013 at 5:48pm

Antero is a fairly good company and is the only one really working the area! so if it's deduction you are worried about I wouldn't be! it's better then leasing with a company that just promises to drill! The lease money runs out quickly with taxes and getting caught up! and finally be able to buy a new vehicle or down payment on a new home or what ever! 

I got 20% gross with eclipse for Noble county Beaver township! Haven't seen a permit or drill pad in my area yet! And it's suppose to be the sweet spot! So all I'm saying having a lump coal in one hand and $225,000 dollars is much better! 

I got 5,250 last October per acre! And honestly the mineral buyers are the only one that have increase the dollar amount mostly.  

JUST MY OPINION! You have to decide if you want the ball start rolling with a company that is very active or hold out for a better deal that might not ever happen with another company that just promises to drill, Antero is a drilling company! not a lease flipper.   

Permalink Reply by bo boboski on December 19, 2013 at 11:17pm

Rick;  just a little X-mas cheer!.  These mineral buying companies seem to be operating ONLY in areas where there is a very good chance of drilling taking place in the near future. If you and your neighbors are getting offers; That's as good sign!

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