A landman called and made a small offer per acre for my 320 acres in Township 15S,36E. It has not been leased for the last 5 years, but was leased out at a $300/acre bonus for the previous 10 years.
There is not a lot of activity in this area, so I am at a loss as where to start the negotiations.
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Is it better to drag my feet and wait to see if the leasing company will raise their offer?
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Should I through out a figure that I feel is probably too high, but they might accept?
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It is always difficult to negotiate with a complete lack of information and in this business it hard to find any.
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I would be more than happy to hire a local oil/gas lawyer, if I felt he could add value to the negotiations. Does anyone have a recommendation for a good oil/gas lawyer in the Lea County area?
Thanks,
Luke
I actually saw a report that this area may be picking up. Matador has lease several thousand acres in Lee recently to explore a cline like shale. Through out your big number.
I subscribe to a service that tracks lease bonus and royalty rates across the U.S. The most recent report indicates the following bonuses for the North half of Lea:
Low 15.00
High 6312.50
Most common 187.00
The south half was significantly higher.
Alternatively, you can go to the county clerk's office and look at leases nearby your property, and contact recent lessors to find out what they received. Most mineral interest owners I know, will freely divulge that information, as long as your not from the government.
The first offer was $100 per acre. We will see where this goes.
Luke,
I have 80 acres in Rosevelt county and a land man called me last year to lease that. He offered .16 Royalty and $50 per acre. I asked what country he was from and he went on to tell me that New Mexico was a different animal. I asked if they paid a different price for Oil than those in Texas. Needless to say I did not lease with him.
Since you have 320 acres I suggest you spend a few dollars and talk to an Oil and Gas attorney. He will be worth it, with new clauses you will need to add, and especially the one where you get the minerals back 100 feet under finish hole, so if your lease is for Gas, then they will have release for oil.
Sincerely,
Chris
The release clause is something I have not heard of, I will do some research with the oil/gas lawyer I have retained. BTW, the offer also included 3/16th.
. Thanks for the advice from everyone.
Chris Wilson said:
Luke,
I have 80 acres in Rosevelt county and a land man called me last year to lease that. He offered .16 Royalty and $50 per acre. I asked what country he was from and he went on to tell me that New Mexico was a different animal. I asked if they paid a different price for Oil than those in Texas. Needless to say I did not lease with him.
Since you have 320 acres I suggest you spend a few dollars and talk to an Oil and Gas attorney. He will be worth it, with new clauses you will need to add, and especially the one where you get the minerals back 100 feet under finish hole, so if your lease is for Gas, then they will have release for oil.
Sincerely,
Chris
Luke,
I have mineral rights in this Township as well. I was contacted about it in early December, and I told the landman that I would be willing to lease my rights. I did not hear anything again until last week. The landman sent me a contract on this, along with two other locations in Lea County, totaling 42 acres of interest, I had no sooner received the papers, signed, and returned them, and I received two telephone calls last night from landmen looking to lease my rights there. I was not aware of this website, so I probably leased my rights too cheaply. In any event, there obviously something up there. You might want to go high on your lease.
Connie and her sister have rights in Eddy County, but none if them were interested in that area.
Greetings, hope you are doing well.
Carl
Carl,
Would you send me an email with the names and numbers of the three landmen that have contacted you. You can reach me at [email protected]
I will let you know how this turns out. It is nice to see that the internet is allowing us mineral rights owners, to see what the landmen are up to.
Regards,
Luke
Luke,
My name is Becky Reed and inherited some minerals from my father in this same area. I was recently contacted by a land man out of Texas. What is a fair price to lease for in this area? They offered me $300 for a 3/16ths? Is that good?
Becky,
What company does the landman work for? My guy is offering $400 and 20%. There seems to be several companies interested in this area, suddenly. That seems to be the best offer I am getting from them. They are looking at a horizontal oil well.
Regards,
Luke
Oh wow. I am glad I got on here. He was from Tyner or something. I received a call last night from a company out of Oklahoma interested as well. He said he would beat any offer. Thanks for your help
I finally went with the landman from Midland, Jeffery Tyner. He seemed to be much more organized than the guys from Oklahoma City. Everything went very smoothly and the bonus was wired to my account in less than 24 hours. I felt very comfortable dealing with Mr. Tyner. Hopefully, their operator will drill a well and hit oil.
I leased to Tynes as well, but it took a couple of weeks to get my check. No wire. I did not get the impression throughout that they were organized it motivated. But, at this point, let’s get started end get some production.
Luke and Carl,
May I asked the terms of your lease? Of course everyone is different but while in the past I would go into a 3 years with 2 year extension, I have found that if I write a 3 year no option period, that they get around to my property a little faster, and so far the Gods be with me, my payouts have been larger with these energy companies. So I was curious what terms they were making out there.
Continued Success to both of you,
Chris Wilson
Chris,
I signed a 3 year with a 2 year extension. The 2 year is at 125% of the initial 3 year.
Luke