Any of you guys have any experience with companies wanting to lease your property in northern MI?  We have acreage in the Harrison area, and have been approached to lease the property.  First they offered $25 acre, then came back and told us they need to get this wrapped up, so how about $50 acre.  The property next to us has a well on it, so there is oil in the area.  this is not to drill, if they decide to drill a new contract has to be negotiated.  This is supposed to be for exploration only.  Anybody have any experience with this?

Is that a one-time payment, monthly, annually, etc.?

Get a lawyer. If they are interested the have good reasons.

Before the price collapse a local farmer was getting $50,000 a month (50% contract on the value of oil being pumped), now it's much lower. The business is set to cycle back toward higher prices. Make sure you don't sign something that screws your income in the future.

Acer leasing varies, never take the first few offers.  Also make sure there is a time limit to drill for production.  If nothing is done in a set amount of time, they lose the lease.

The land is leased to lock the possible production to that company.

As far as production, traditionally, royalties are 1/8 of production or 12.5 percent.  If you get offers for less the land man is pocketing the difference.  Good negotiatiors or high producing areas can get 3/16.

This of course only matters if you own the mineral rights.

Nothing happened on our land but Dad leased only the back half in order to keep them from drilling an exploration well and drive way. If they drill or add a road I think they can years letter come back and reopen thing up. In Traverse City there is a good attorney that deals with these things he has been in the paper around here. If you won't his name PM me and I will try to find it.