Mid-America’s team has more than 40 years of experience selling, buying and leasing mineral properties, as well as the decades of industry experience necessary to determine a property’s value. We have represented land-owners, producers, law firms and financial institutions. Geographically, our experience stretches from coast to coast.
A typical engagement begins with an evaluation of the property in order to determine its fair market value. For additional information regarding the sale or purchase of a mineral property, refer to the Sell-Side Representations or Buy-Side Representations section.
Mid-America has been retained by both lessors and lessees. We have been retained to perform in-depth lease assessments, including both financial and non-financial lease terms, and to negotiate new leases, lease amendments, and subleases. Mr. Nowobilski has authored two published articles that appeared in Aggregates Manager Magazine. The articles discuss several of the financial and non-financial aspects of mineral leases. The first article, “Mineral Leases: Royalty Rates Are Only Part of the Story (Part 1)” describes key financial aspects of long-term mineral leases including the determination of a fair earned royalty rate and annual minimum royalties. The second article, “Mineral Leases: Royalty Rates Are Only Part of the Story (Part2)” discusses non-financial terms such as the producer’s (lessee’s) rights and obligations, default provisions and lease term.
Mr. Nowobilski’s experience includes six years as President of Zeigler Coal Holding Company’s (a publicly traded $1 billion revenue company) land company subsidiary. In this position he was responsible for managing a real estate portfolio consisting of 2.5 billion tons of mineral reserves, 100,000 acres of surface land and 70,000 acres of oil & gas properties, and an annual budget of $30 to $40 million. Management of this real estate portfolio included the negotiation and administration of approximately one thousand mineral leases and surface use leases. Mr. Nowobilski has been retained as an expert witness with respect to establishing “market royalty rates” as well as mineral property values.
- Property Sale/Acquisition
- Sell mineral property for the highest possible price and favorable terms.
- Lease Negotiation/Subleases
- Negotiate a mineral lease that sets forth precise lease terms that are fair and equitable to both parties. We believe it is essential as mineral leases are typically long-term contracts, often spanning decades. As such they need to address the potential for the long-term changes in royalty rates, regulatory obligations, change in ownership and the financial fortunes of the parties.
- Lease Assessment
- Determine if financial and non-financial lease terms are fair and equitable.
- Assess the earned royalty rate(s) and the annual minimum royalty, or rents, to determine if they represent market rates.
- Non-Financial Review assesses all other lease terms, including lessor’s retained rights, lessee’s rights and obligations, liability indemnification and reclamation requirements.
- Lease Renegotiation
- Goal is to reset the lease’s royalty rate to a market royalty rate and to amend non-financial terms as may be necessary.
- Expert Witness Testimony
- Typical assignment includes testimony with respect to establishing market royalty rates and/or mineral property value.