Marathon sent out “amendment” to renew 3yrs without option from Delago contract which expires on Dec. 13, 2022.
We leased previous year with PVA 25% & $1,500/ac but much less with Delago 20% & $1,000 means oil & gas prices were much less also at that time. Now oil & gas prices are going up fast.
Anyone have any advise how shall I go about this “amendment” proposal? Much to appreciated for all participants & enjoy reading
Sam, can you please give me a contact information for Marathon Leasing Dept! I have been trying to see if they are interested in our property in Lavaca County. Thanks, Karen Cash
Unfortunately, the price of everything has gone up along with O&G, including cost to drill and produce. I would wait. December is a fair piece down the road. I lean slightly towards Marathon wanting to lock in a low rate for them to be this early.
Hi Karen, here is for Marathon Landman contact (469) 688-2570, best
Karen, where are you located in Lavaca county?
Hello Sam- lease bonus prices have nothing to do with the price of oil &/or natural gas and everything to do with competition. You can always ask for more, but be prepared for the offer to go away as well.
Thank you very much for kind advise. That’s what I thought also. When the time comes to renew this lease, I would like to keep in touch pls. Stay safe & enjoy the day
Sam, if I’m understanding right, Marathon assumed a lease you had with Delago, and the proposed amendment Marathon sent you would extend that existing lease for three additional years based on the same provisions in your current lease. I assume that means Marathon is offering you another $1,000/acre bonus for that three year extension.
If that’s where things stand, one possibility would be countering their proposal by simply saying you aren’t willing to extend on the same basis as your current lease but would consider it if they’ll come back to you at increased bonus and/or royalty. Alternatively you could spell out what you would be willing to accept, in which case you might want to put a time limit on them accepting your counter.
Marathon may not agree to any changes but, when it comes to signing an extension, any of the provisions in your current lease or in their offer are negotiable. For example you might agree to make the length of the amended term 1 or 2 years rather than 3. If they say no to changes it won’t have cost you anything to try and, like RW suggested, not agreeing to extend when there is considerable time left on your current lease term seems low risk.
You didn’t mention the size of this mineral interest. Like you may have found in working out your previous leases the net mineral acres you control makes a difference in your negotiating leverage. Whether Marathon will have any potential competitors for your lease, or controls lots of acreage around you, may also make a difference. If the interest you own is small you might consider trying to contact other nearby landowners who are under lease to Marathon and see if they are willing to share information, and possibly negotiate as a group regarding lease extensions. Identifying and contacting those kind of folks may require researching your County deed records or through on-line sites like TexasFile and then doing some “cold calling”, but you might be surprised what you can learn.
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JBob Hi, it is a little over 1000 acres located between Yoakum and Shiner between Hwy 95 and Lavaca County Road 315. It belongs to the Koether family decedents.
Thank you for the Msrathon Landman information.
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