I have recently inherited some minerals in Beckham County and am receiving lease offers. How do I go about finding out what a good price is?
Thanks.
Negotiating the lease terms in an oil and gas lease is much like negotiating any other contract. Most terms in an oil and gas lease are negotiable. Your ability to effectively negotiate provisions such as length of primary term, royalty, bonus, and protective clauses you might want to add is proportional to your knowledge of the area being leased. The more informed you are about the activity in your area, the better your bargaining position will be.
For instance, if your acreage is within a mile or two of some recently-completed prolific oil or gas wells, you can use this fact to empower your negotiations with a potential lessee. Most companies will not volunteer information that will help you negotiate a better lease so you need to arm yourself with such knowledge. It's crucial if you are to negotiate effectively.
Since no lessee will likely volunteer much information, you could contact or visit the county clerk's office or abstractor's office in the county where your minerals are located and check for other companies that may have filed leases in your area recently. Their address would be on the leases they filed and you could probably find a phone number for them from that information. Perhaps others would offer you a better deal.
These days, many sites on the Internet can provide you with information concerning leasing activity, well completions, production, drilling permits, and forced-pooling orders. The bonus amounts included in forced-pooling orders in Oklahoma and some other states are usually based on the average bonus amounts being paid in the immediate area covered by the pooling order. Obviously this information can be used to negotiate an appropriate lease bonus if the one you've been offered is substantially lower than recent pooling bonus amounts in the same immediate area.
The Oklahoma Corporation Commission's website has a wealth of information available online that's available to the public (your tax dollars at work!) You can look up recent well completions, production, drilling permits, and forced-pooling orders in your immediate area that will help you determine how "hot" it may be might be and thus give you a more knowledgeable position to bargain from.
Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL