CO – Elbert Co.

Elbert County

Elbert County

This area is provided for users to ask questions and discuss leasing and oil industry activity in their specific area of the Niobrara. It is helplful if you list your Section, Township and Range so that others can know how close they are to you and what information may be relevant.

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11 Responses to CO – Elbert Co.

  1. Marilyn Hardman says:

    Through my late dad’s testate estate I have mineral interests (9.1 acres) located in the SE1/4, W1/2NE1/4 of Section 4, and NW1/4 of Section 13, all in Township 3 North, Range 59 West of the 6th P.M. In Morgan County, Colorado.
    I was called by a landman with Bijou Creek holdings expressed a desire to lease our mineral rights. He sent oil and gas lease agreement offer form and this is what they are offering: Five year paid-up primary term, $50 per net mineral acre total bonus payment, additional 3 year renewable lease option and 1/8th royalty payments which I think is 12.5%. I don’t know anything about this kind of thing but my son-in-law works in oil and gas industry and has told me that he thinks 5year term is too long, and bonus payment and royalty payments are too low and that I should negotiate for more. How should I approach the landman with this offer and should I do it on my own or pool with my siblings who have equal interests. One of my siblings though has passed away and another has already signed the offer as is and sent it back. Any advice would be welcome. Thanks.

    • Johan Holmqvist says:

      5 year term is fairly standard. Given the oil market and perhaps needing anothr 2 years before we see mid $60’s oil it will be a while before Operators will drill. The other problem is Elbert Goverment is still clueless the oil potential in Elbert. There has been one vertical well drilled in the last 20 years and it was completed in Jan 2016. $50 is about going rate but might as well ask for more. 1/6th royalty is standard. I have not seen a 1/8th royalty in many years. If the company has leased a good amount in your Township he can always force pool your minerals into same average everyone else received.

  2. Erin says:

    WE are in Section 18, Township 6 South Range 64 West. Who is doing leasing here?
    I heard Conoco Phillips pays $2000 per acre to sign a lease–is this true? How do I get a hold of them–does anyone know?

    • Debbie T in CO says:

      Hi Erin,

      I can answer your questions for your section. I live in the same section and have been involved in oil/gas leasing in this area. Please email me at tdebbie77@yahoo.com. I can help with negotiating a lease that will protect your assets, surface and water.
      Debbie

  3. D Moeller says:

    Hi Guys, just found this site, I have been active on a different site and thought I’d steer ya guys toward it. I live North of Spring Valley just off of 17 closer to Co Line or 194. This other website is pretty active and has some good info (just trying to help out)

    .mineralrightsforum.com/group/elbert-county-co-oil-gas?commentId=4401368%3AComment%3A156217&xg_source=msg_com_group

  4. D Moeller says:

    Hi Guys, just found this site, I have been active on a different site and thought I’d steer ya guys toward it. I live North of Spring Valley just off of 17 closer to Co Line or 194. This other website is pretty active and has some good info (just trying to help out)

    http://www.mineralrightsforum.com/group/elbert-county-co-oil-gas?commentId=4401368%3AComment%3A156217&xg_source=msg_com_group

  5. bgroth says:

    Trex1200r

    What was the outcome of the leasing you referenced in May??

    Seems like more burdens are being put on royalty checks by lease agreements which provide for on-lease and off-lease expenses deductions (owner-subsidizes-operator) as more foreign or NOCs negotiate big bucks for a slice of the American pie in JV deals.

  6. JimF34 says:

    I have 6.5 acres of rights on my 13.5 acre property in Ponderosa Park Subdivision.
    Would be interested in hearing from anyone who is forming a pool to negotiate leases and perhaps getting an attorny to protect ourselves from a bad lease. I have been approached by multiple landmen and Chesapeke but have not gone any further.
    I also need to make sure this doesn’t impact my mortgage as from what I read it may.
    Thanks.

  7. Trex1200r says:

    Hi RockPick. Looks like I need to go back to grade school. 18.75 is the offer less expenses. Most of us are equally concerned about how the drilling will effect our community, our water, our home values, etc…. That is kind of the dillemma we are in at the moment. The potential risk to our community and our home values is greater than the potential gain from royalties. On the bright side though, at least we own our mineral rights and it isn’t just all negative.

    A few from our group went down to the Elbert County office and aquired a copy of the lease I think you are referencing above. They did a nice job of negotiating. Our goal is to acheive similar terms and protections. The more I learn the less concerned I am that we won’t be able to get more favorable terms.

  8. Trex1200r says:

    First off, thanks for this website!

    Chesapeake Energy is offering leases in Spring Valley Ranch. This is a small golf course community in NW Elbert county. Section 32, Township 6, Range 64. Generally lots are 1 acre or less. We are surrounded by undeveloped land with only a few owners. The Chesapeake Rep, though pleasant enough, has a take it or leave it attitude at this point. I am sure this is how they always start out, but hopefully enough people leave it so that they have to eventually be willing to negotiate the terms of their offer. There is a small group of us who have already expressed interest in banding together, but I fear that unless we can join forces with one of the larger land owners in the area, we won’t have enough clout to do much.

    If you refuse to sign, do they have to eventually negoatiate with you if they want to drill? Is the standard lease considered a reasonable offer by the COGCC? They are currently offering 1/6 royalty and $750 signing bonus per acre. The royalty percentage doesn’t sound terrible but it is less expenses. Seems like the going rate is 1/5 pre expense. The bonus also seems a little low. The bottom line is that there are lots of other terms in the lease that I don’t want to agree to.

    It seems like it should be a lot harder to force pool 30 different people with one acre properties than it would be to force pool one 30 acre owner. Any thoughts?

    • RockPick says:

      Hi Trex.

      So it would appear that Chesapeake has plenty of surface access to your acreage from un-developed areas contiguous with your development. That probably means that they have ready secured access for a drill site with somewhere else close by. I don’t know how many acres your subdivision has, but the terms sound less then ideal. Chesapeake is known for giving at least 3/16 royalties (18.75%) at a minimum. If you are getting less than that, then in my opinion, you are getting robbed. Are you talking with Red Sky? You might get a better deal if you spoke with Chesapeake directly.

      The only way for you to deal with them on an even footing and get a fair deal (good for them and good for you) is to form a coaltion of whatever acreage you can muster, get a good Oil and Gas attorney, add some protections for your surface and water, and then shop your acreage around to other companies. See what Conoco Phillps has to say, or maybe Anadarko.

      Just because they are the first suitor for your acreage doesn’t mean that you must lease with them. At 1 acre lots, its not like you will get rich, you might get a few bucks if they have a good well, but the money won’t change your lives.

      My recommendation would be to organize, get representation, state your terms, and counter offer. If they are interested, then they need to compromise. I personally wouldn’t take anything less than 3/16 royalty. I have heard of some subdivisions getting 20% royalties and $2000 and acre bonus payment… so don’t sell yourself short to the first offer. If they say no, what have you lost. Not much. Please scratch out all that expense garbage in the lease, you want to be paid at the wellhead without cost. Why should you pay to have them transport your oil to market, that’s their cost, not yours.

      That’s just my opinion. I think you can get a better deal than what you have described. You are in a hot area, and in an area where the first wells in Elbert County may be drilled according to rumor. I’d hold out for more. …And don’t be scared by “Forced Pool” language. Its a tactic that is sometimes employed. COGCC won’t force pool you unless you are completely unreasonable, which doesn’t seem to be the case here.

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