Replies to This Discussion

Permalink Reply by Jefferson on November 18, 2011 at 8:40am

The group we signed with the spud fee is 30,000.

Permalink Reply by Nelson Roe on November 18, 2011 at 9:42am

I have heard of & seen leases that had the spud fee at 15k, 20k, 25k & 30k.  This is usually one area that is fairly open for negotiations so start your asking at the higher end & then if the company bulks, let them negotiate it back down.  Just try to gain value elsewhere as you let this price be retracted.  The group I was with started out asking for a 25k spud fee... We ended up with 15k, but we gained a few other consessions that benefitted all in the group, not just those who will end up with a well pad on their property, so it was a compromise our group members were willing to settle on.  I believe 15k is the lowest that I have heard of in current leases though, so I would probably set that as a minimum...