Durham Unit NW/4, Section 152

[Carl_Alexander]

I recently received a letter from an attorney representing ITX Corporation, who is the current operator of this unit. I have 69 acres in this unit, and I am uncertain that I am actively receiving any royalty payments. The attorney indicated that the operator is working to to restore production, and they have submitted me a Paid Up Oil and Gas Lease for two years term. They indicated no bonus payment, but they would increase royalty from 1/8th to 3/16ths for this term. They further indicated that they needed to get this new lease to assist the operator in increasing the production, which I do not understand how that would help.

Has anyone else received an offer such as this recently? Would someone else knowledgeable in this area provide some information to help me decide whether to accept this offer? Would it be in order to request a bonus payment and how much?

[Rockhound2]

If the operator can clear up all interest holdings and well records it can make the economics of operating the well more sustainable.

[M_Barnes]

Never hurts to ask for a bonus. The higher royalty may not support it. You may be able to negotiate a better lease with better clauses. Be aware that you need to see if horizontal drilling is in the area because they may try to hold a lease with an old vertical well at a low royalty until they can get a horizontal package together. Most of those leases are at 25%.

[Rockhound2]

Right it may be worth a bonus to save a lot of research or clear up records

[Rockhound2]

This whole land and minerals thing is a complicated business nothing easy about it and then having to drill and possibly produce