I received a lease offer from Hal Smith for Section 25 8N 5W for 1/5 but just $800 per acre. Is this a little low? Val Connell Carter
SORRY WRONG COUNTY Val
Interesting because it was pooled 12-14-12 for $1000 3/16 and $950 1/5 by Newfield. Well permitted, but not yet drilled. A well was spud from 25, but went north.
Val,
That does seem a bit low, but Hal Smith will definitely flip this lease to a bigger company. You can always(1) wait to see if more offers come in, where there's one, eventually there will be more; (2) counter his offer; or (3) hold out for a pooling election, which will likely have bonus and royalty terms at least as favorable as the lease offer. With options 1 and 3 you have to be prepared to accept the possibility that there may not be any other companies that come along to lease. However, generally speaking, if a broker is in your area leasing it means that a larger E&P company has an interest in developing the area.
You are right about the events that had taken place. My lease with Newfield expired in February so it left the minerals available for a new lease. I will say one thing for Hal Smith he immediately took care of an issue to prove my ownership that might have been a hassle at DO time. Recently I have had some problems with the oil companies simply taking my name off the list which always presents a hassle. Thanks so much for your reply.
Val Connell Carter