Madison County! Just received an offer from Navajo Resources Corp.
Concerning AMY Boatwright Survey, A-7, Madison County, Texas.
Lease offer: Tract total 34.0 gross acres of land.
Own 6.0 net Mineral Acres. Offer $500 per net mineral acre for 3 years with a two-year option to extend for $400 per net Mineral Acre plus 1/5th for the duration of the production life of any wells on property!
As you can see I am new to this forum and would like any comments.
Not sure where this area is in Madison County - EOG has been very active with some very good wells along the Madison / Walker County line.
There is also production / development in other areas of the county but to a lesser extent.
All this new drilling is tied to expensive (i.e. $5-8 Million) horizontal and frac-stimulated wells.
Value of minerals varies by area depending on subsurface issues - even in a small county like Madison.
With respect to your offer (and this is just my opinion), the term (3 & 2) is fine but ideally the royalty is too low - should be a max of 25% (more the norm in the trend with exceptions).
Bonus is low if you are in the EOG area but in the market for other areas.
I would suggest you try for either a higher bonus or a higher royalty - but not both.