I have been sent a lease by Stephens Production Company. It is a 3 year lease. They would not include "a Most Favored Nations Clause" at 3/16 ($150.00), so I ask for 1/5 with no bonus. This they did. Has anyone else leased in this location?
I also received a lease from Stephens, for Sec. 10-07N-04E, at the same terms you're indicating, $150 per acre bonus and 3/16 royalty. I want to negotiate for Exhibit A clauses (commencement, depth clause, no deduction, and shut-in royalty). I read the following article on Most Favored Nations clause here at the MR board: http://www.mineralrightsforum.com/profiles/blogs/tied-to-the-anchor-the-most and I see this clause isn't as important to me, but I do want to get a fair royalty. I'll go for the 1/5 with no bonus as well. Thanks for posting the information!
My minerals are in sec. 11 -07N-04E Real close I think. I live in Texas and do not have a map. What do you know about Stephens Production? Are they an operator or are they just a broker? If a broker, they could be just buying up royalties to sell, and not have any plans to drill. In the mean time they hold the leases for 3 years, while others drill all around. I have the lease ready to mail, just wish I knew more about them.
Carol:
Here's a map of where Stephens drills; they appear to be an operator: http://www.texas-drilling.com/operators/stephens-production-company...
I'm not sure I get your meaning of "buying up royalties to sell." Are you referring to oil companies wanting to buy mineral interest? If Stephens wanted to buy my mineral interest, I'd ignore the request--I get lots of those offers, but I don't want to sell ANY of my mineral interest, as you stand to make more by getting royalties from oil or gas production over the long term.
A legitimate oil lease, assuming one gets the necessary clauses--which I now negotiate for--by my understanding states that after 3 years, if the company hasn't produced any oil, the lease terminates. I don't accept the 2-year extensions most oil companies ask for, the reason being if some other company offers a better lease, I want to be free to move to that offer, assuming the original lease has terminated because of lack of production.
Angela
I like that map site!! I agree with you, would never sell. What I meant was there are "brokers" out there that try to buy up leases and sell them to other operators for a profit. This is happening in the Cline Shale in West Texas. Some have leased to brokers and now they are not having anyone drill on their property, while their neighbors have drilling taking place, and stand to start collecting royalty payments. But after seeing that Stephens is drilling in the Eagle Ford Shale in South Texas, guess I will mail the lease. Thanks for the information and good talking to you.
Angela Havel said:
Carol:
Here's a map of where Stephens drills; they appear to be an operator: http://www.texas-drilling.com/operators/stephens-production-company...
I'm not sure I get your meaning of "buying up royalties to sell." Are you referring to oil companies wanting to buy mineral interest? If Stephens wanted to buy my mineral interest, I'd ignore the request--I get lots of those offers, but I don't want to sell ANY of my mineral interest, as you stand to make more by getting royalties from oil or gas production over the long term.
A legitimate oil lease, assuming one gets the necessary clauses--which I now negotiate for--by my understanding states that after 3 years, if the company hasn't produced any oil, the lease terminates. I don't accept the 2-year extensions most oil companies ask for, the reason being if some other company offers a better lease, I want to be free to move to that offer, assuming the original lease has terminated because of lack of production.
Angela
Carol:
Thanks for the clarification, now I see what you're saying. I didn't realize there were brokers buying leases, but from now on I will be on the lookout for them!
Angela