I hope I am doing this correctly as I have not posted for several years. I received a lease offer from Compass for my mineral rights in section 35 8N 11W for $500 for 3/16 and $400 for 1/5 royalty. I wonder if this is a good offer and if anyone has information on what is going on in this section.
Welcome back!
Not much is going on in that section. Only one lease has been filed in the last two years. Section 20 which is about five miles away.
Poblano Energy had a horizontal well in section 36 drilled back in 2018. It was drilled into the Hoxbar, but only produced for 3 months and was plugged and abandoned. They also had a well planned in section 35, but never drilled it. Ask the leasing agent what the planned reservoir will be and when they plan to drill. Ask for the time frame for the lease. A three year lease is fairly common, but a five year lease is a red flag to me.
Always a good idea to have an attorney look at the draft lease. The bonus is not as important as the royalty and the actual clauses in the lease. They can hold your family for decades.
Thank you for the information. They were offering 3 years with a 2 year option at 125% of the original bonus. I do not think I would take the 2 year option.