A little oil lease follow up

rrlund · Jul 22, 2014

I just did a search for that company that wants an oil and gas lease on my place. An outfit out of Traverse City called Maritz Land Company.
In a state land oil lease auction on May 12 2014 they leased 2866 acres of state land for $12 an acre. Terms were quite similar to what they're offering me. Only difference is,they've offered me $50 an acre. I've contacted the BBB to check them out just to be sure.

Zachary Hoyt · Jul 22, 2014

Years ago the neighbor up the road got $20 an acre, I think it was, then he sold a plot of land to someone to build a house, about 5 acres. They can't build because of the lease and now they can't seem to sell it either because no one else wants land they can't build on. Been on the market for years. I would be very careful, you don't want to tie up your main asset for something that is pretty small in comparison.
Zach

rrlund · Jul 22, 2014

This is just a 5 year lease with another 5 year option. Any lease I've ever signed before was a 10 year.
It's not unusual to sell land with the seller keeping the mineral rights though.

rrlund · Jul 22, 2014

The BBB doesn't have anything on them but an A+ rating.
BBB results

rrlund · Jul 22, 2014

Here's their own site too. They don't seem to be some fly by night kids trying to make a quick buck flipping leases.
Maritz Land Co

Sparktrician · Jul 22, 2014

Just a note.....the BBB is kinda a racket.

I, as a electrical contractor have little to no faith in them. They call us to "sign up" for their service, and basically you pay the money, and get a a+ rating so long as you get no complaints. If you call and try to checkup on me now, there is no record of my company, I have been in business 7+ years.

I wouldn't take the BBB word as holy grail....

Just my opinion

rrlund · Jul 22, 2014

Ya,I've heard things like that. I did contact the BBB myself,didn't use the link from the company's site,although they do link to them.

dcarp · Jul 22, 2014

Here in SE TX In the Eagle Ford formation area the oil companies are offering $1200-3000 per acre with a 22%-25% share for a 5 year lease. The fine print is the most important part of the lease in regards to your land and how they repair it and install fences, gates & cattle guards.

1130Leo · Jul 22, 2014

Maritz is legit, however they are leasing for someone else, Hard to say who for sure. It depends upon what formation they are planning on targeting. I would ask who they are leasing for, and what formation. You can limit the lease to that formation, I do not know exactly what area you are in up there, but most areas can have oil and gas in at least two different formations, if they are after the deep formation, you could reserve the shallower antrim formation to be leased to someone else. It can and has been done.

Nick m · Jul 22, 2014

Apparently you had another post I haven't read. There were two different companies a couple years ago running around here trying to get people to sign up. They got up to $100/acre. I think it was a 7 year term if I remember right. Had a percentage bonus in there too. The people trying to get people to sign up were the middle man. They'd get the lease, then sell it to someone else. They did end up putting up a well on the neighbors property. Looked like a big mess. Made a gravel road and a dirt wall all the way around it. Probably a couple acres worth. They didn't find what they thought was there so they abandoned ship. It was in the lease they had to put things back the way they were if they did that. They did and you can't even tell they were there. Haven't seen hide nor hair of them since.

1130Leo · Jul 22, 2014

If you do lease, do not give them the automatic renewal at their option. If you do and there is any production close to you within the first 5 years, they will renew you without blinking, and if there is not, they will not renew. However, if there is production near you and they do not have the automatic renewal, your next lease, which I would recommend negotiating with them at that time for a 3 year lease, with a much better rate. Your goal should be production and royalties if at all possible, limit the time they can lock up your property, it will increase the odds of your property being produced if there is oil and gas there.

big jt · Jul 22, 2014

My experinces with Oil lease's is out of North Dakota so prices are different I am sure. We signed a lease as a trust about 5 years ago and the front money was better than what you are talking. In years past we were getting pennies in comparison.

The ones I have dealt with were perpetual if drilling occured. The ones that were pennies on the dollar never drilled and the whole process started over 3 years later. Fast forward to the development of the industry we have today. yep there are productive wells now so no more leases to sign just royalties to collect. Would have to go back and look but I think we wound up with something like 20% We just own the mineral rights no surface.

jt

A little oil lease follow up

rrlund

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Zachary Hoyt

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rrlund

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rrlund

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rrlund

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Sparktrician

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rrlund

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dcarp

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1130Leo

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Nick m

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1130Leo

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big jt

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