Leasing help

Oil and Gas Leasing Help
1

Scurry County Texas section No. 154 Block #3 Abstract 880 and 2427
Certificate No 44/5977

Offer to lease 5yr 350.00 acre 1/8 royalties

Offer to buy

25,000.00

I don’t agree with the 5 yrs needs to be 3yr and option for 2yrs I am not sure about the royalties either

I think the offer is low

The last 5acres of that section they need to sign.

2

Personally, I would go for the three only and not a two year option. Would also go with 20% minimum. 25% better. You may need to really negotiate the lease. The 1/8th offer leads me to believe they are fishing.

3

Carr Resources has recently permitted a well and it looks as though the drilling pad will be located in the far southeast corner of your section. I suggest you attempt to discover the royalty and per acre bonus received by other mineral owners in the section. texasfile and courthousedirect are two online resources which mirror county clerk recordings. If you elect not to use an oil and gas attorney or other party with expertise in oil and gas leases, you might white out sensitive information and upload a copy of the lease to this forum, requesting opinions on the lease language.

4

i will attempt to download the lease. It looks pretty standard I will not agree to a 5yr term however. I think the royalty amounts and per acre are to low. one of the documents is to sell and again I think the number is too low. Tetra Oil & Gas is on the one to purchase my interest. Do they have to all owners on that section before they are able to flip it or to drill

5

You might want to keep in mind that: 1) there is really no such thing as a “standard” lease; 2) the fine print in the lease (for example, lease terms regarding costs that can be deducted from your royalty) have a lot to do with the income you can realize from the lease over time; and 3) you may need to live with the lease for decades, because it may be in effect that long. For these reasons, you may want to consider having an attorney assist you with negotiation of the lease terms.

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