My parents lived in Palestine until the early 90's and when they moved, they sold their land and home. I recommended to them that they retain 1/2 of their mineral interest in the property when they sold. I have now received a lease offer on the property and was wondering if anyone has any knowledge of any drilling activity or interest southeast of Palestine? The property is about 2 miles outside Loop 256 and east of Crockett Road.
They are offering $125for a 3 year primary term with an option to extend for an additional two years. Their offer is for 3/16th lease royalty.
Since joining this forum I have learned a great deal about oil leases and believe this could be improved on. I plan to counter but I don't want to be ridiculous either.
I have learned that the remainder of the lease should address these other issues regarding the lease also. Some questions and concerns I have are as follows:
1. The shut-in clause; time limits, triggers, notifications etc. What is value of it? surely more than a dollar/nma ; What is fair?
2. Pugh Clause? I have a total of 17 net mineral acres so what are wise options here?
3. I have read that there should be a separate lease for each tract of land if not contiguous.
4. Delete any clauses that excuse operator's obligation to timely or properly pay.
5. Should I accept a draft or should I ask for a check since they have already performed the title search on my brothers lease. He didn't bother to even counter their first offer so they should have no justifiable reason to delay payment to me, right.
I have more concerns but these are at the top of my list so far and would like to counter their original offer but am reluctant to come back to them with something that is not reasonable. If anyone could give me any guidance it would be greatly appreciated. All I'm needing are opinions and past experiences others have been through and I fully understand that I'm not asking for legal advice... just opinions. I'm like an old hungry cow, I just need to be herded in the proper direction to the barn. Without direction I could end up at the Slaughter House....so any guidance will be grateful and much appreciated. FYI Calhoun's Meat Packing Plant was between their property and town in case anyone is familiar with that bit of trivia.
I will appreciate everyone's input...Thanks...David