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Oil/Gas/Hill Co. Montana Lease Offer


My lease is up in Feb of this year and have received a new lease.  This is located Township 34 North, Range 14 East, M.P.M.  Section 1 : SW4 & Section 12 : NW4, consisting of 320 acres.  The company is offering $1600 bonus on a 5 year lease.  I am thinking this is way low.

Well, it's about "location, location, location" of course, and unfortunately your location is not a good one. I'm pretty sure no one else is getting much more than a $5/acre offer right now either in this area. You could of course just refuse to lease if you think it's too low, but if it were me I'd go ahead and lease but try to negotiate some other benefits if they won't budge on the bonus amount. I might ask for a higher royalty in lieu of a higher bonus, or an increase in royalty once drilling costs from a producing well are recovered, or even try to have a "favored-nations" clause included in the lease (you can Google that one if you've never heard the term.)

Point is, even if they won't budge on the royalty you might have some luck negotiating other terms of the lease so the lease as a whole is more in your favor.

You can read my Leasing Tips article on the Mineral Hub for more info on how the game works.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
The Mineral Hub  


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Frederick M. Scott


Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.


I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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