# oil leasing



## Non Typical (Feb 17, 2009)

Not sure where this should be!? I have a piece of property that an oil company wants to do some seimic testing and lease the property for 3 yrs. I come from Louisiana and the amount from that price is tiny. What is the going rate for lease per acre in Michigan? In La. it was $400-$600 an acre. With a 20% on take! Some of the smaller oil companies try to lease property before the big guys do and sub lease it to the bigger guys, making money without the work, sorta. Please pm if you know! Forgive if I place in wrong forum, and move to right one, thanks.


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## Shoeman (Aug 26, 2000)

Watch that

Had a buddy approached by a gas company. Promised him a portion of the profits. Let's just say the noise and destruction of his parcel was hardly worth it.


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## multibeard (Mar 3, 2002)

That last lease agent I had contact me offer me 10 bucks an acre. He got laughed off the place. 

I got more than for just doing the seismographing a couple of years before with the option to lease if they wanted to after they seismographed. They did not pick up the lease and I can not remember what it would have been.

Back around '80 I got paid $150 an acre for a 10 year lease with an additional $10 an acre through out the length of the lease. I do not thnk you can get any where that any more


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## Non Typical (Feb 17, 2009)

So $13.89 an acre for 3 yrs is not so good!?


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## tmanmi (Sep 20, 2005)

2 years ago I got into a three year lease paying $35 an acre. This was when the big oil boom was on in Calhoun county. I'm probably 4 miles from the closest producing well. Had one company hounding me for $10, told them to pound sand. Told another I want $55, never heard back from them. Talked to another company that said they weren't interested at any price. So I took the $35 and ran. I got a higher royalty than most if they hit. My parents are within 1 mile of producing wells and they got anywhere from $55 to $200 on their different leases. Read the contract thoroughly, make sure that production costs don't come out of your royalty, find out if it is going to be pooled, make sure that there is a clause about putting land back to original condition, should have a clause about damage and timber if you have any. Tell them $20 and see what happens.

As to yet they have not done any seismic test on my property and my bet is that they probably won't with oil prices the way they are. I will be surprised if they offer to renew the lease or it will be a lowball. What company are you talking to?


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## Non Typical (Feb 17, 2009)

Anyone else?? I come from Louisiana, and the going rate there is $400-$600.00 an acre! Why is it so cheap here?? Plus a 20% pay on production. I just called my buddy with Shell Oil and he is telling me that is still the going rate.


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## jml2 (Dec 10, 2004)

We signed an oil lease in Hillsdale County last year. I am sorry that I do not remember exactly how much it was per acre (I could find out) but it wasn't anything close to what you had in Louisianna. The approached me with an offer. I had my wife look it over (she is an attorney). We made all kinds of changes to the lease:

Asked for twice the amount they offered
Asked for a shorter lease term
Asked for a higher percentage of profit if they drilled
Determined when and where the could drill

We didn't expect them to accept all these, but they did with no questions asked. We are 3 or 4 miles from active wells. I haven't heard from them since signing the lease. I think our check was in the $7000 range. I have 80 acres. 

Hope this is helpful.


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## russfim (Jul 19, 2008)

Exploration in Mich. has been slow to moderate for many years now. Lease prices vary based on the strength of the oil/gas prospect. Prices in Mich. were up when the activity was much greater. $100-200/acre years ago would probably be $10 to $50 now on a hot prospect. Seismic activity won't hurt a thing. Consider a "no drill" clause for your land. The long & short of it is this: are you in the game or not? You won't get rich from a lease. But if you'd like to perhaps "strike it" you gotta sign a lease. Any drilling activing will be well-regulated and afterwards your land will be better now than it would have been 50 years ago. 

I have 80 acres and a dry hole from the 1950's. A treestand hangs in the area now and many a deer have been taken. There are grouse and woodcock and even a few cottontails around the old drilling location. The maples and beech trees are absolutely beautiful. The land has recovered.

The bottom line: Michgan is not Louisiana when it comes to O&G production. Lease prices reflect that. If the prospect is really hot then you can wait for a higher price later--if that lease man ever comes back. Time will tell. It's like a poker game and or a crapshoot.


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## tmanmi (Sep 20, 2005)

DEQ/DNR or what ever they are called these days limits Michigan wells to 200 barrels a day and natural gas is not worth anything these days which could affect the lease price.


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## Islander26 (Feb 23, 2004)

tmanmi said:


> DEQ/DNR or what ever they are called these days limits Michigan wells to 200 barrels a day and natural gas is not worth anything these days which could affect the lease price.


A neighbor of my property has a well on his 160. He said the meter averages 285 barrels a day. I'd like to check into that limit.


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## tmanmi (Sep 20, 2005)

Islander26 said:


> A neighbor of my property has a well on his 160. He said the meter averages 285 barrels a day. I'd like to check into that limit.


http://www.michigan.gov/documents/deq/ogs-oilandgas-spacing-1-73_258023_7.pdf

Maybe it's not still in effect. Page to under Basic Allowable.


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## Islander26 (Feb 23, 2004)

Thanks for the info....

Might be still be in effect even though its from 1973. We are in the northern area allowing 300 barrels. I guess they need to pump the max to recoop the cost of that 6 million dollar rig


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