I have rec’d a lease offer of $2,000 per net mineral acre with a 1/5th royalty for a 3 year term and 2 year extension 150% of the current bonus ($3,000). I have no way of knowing if this is a fair offer or if it is low. I feel a little under pressure to make a quick decision as there may be a pooling order pending and if it goes into effect, if I understand correctly, I would have to take whatever amount is on the order. Any help or information would be appreciated. Thank you.
Robin, Your section is currently pending a pooling application by Native. We are leasing in the area for more than $2,000 per acre for a 1/5th royalty. Please feel free to message me privately.
Nothing wrong with pooling, so breathe a bit. They are close to competitive and you have multiple options on the bonus/royalty pairs. Also, they are effectively short term leases of six months or one year for a particular zone.
To your question, I would never take a two year extension. The amount is pretty good, but it is really the terms and clauses on the lease that are the important part. You should have limits on your shut in time frame, depth clause, no post production costs whatsoever, no top lease clause, no warranty clause, yes on commencement of drilling clause. If the lease does not have that, then come back and we need to chat more.
Ms Barnes.,
Thank you so much for the info. The “Landperson” from Native (I’m not sure of the correct title for a female Landman LOL) emailed me today. She handled the lease I did with them for Section 2-6N-3W which was $2000.00 per mineral acre and she added no costs associated with producing, gathering, sorting, storing etc be deducted from your royalty payments to the lease wording. She apparently went ahead and sent me a lease offer for Section 3-6N-3W with the same terms that I accepted for Section 2 even though I have not told her I would accept that. I will email you again when I rec’v it. It would be easiest for me to deal with them again as they have the notarized affidavit of heirship that I filled out for the Section 2 lease. She also sent me a copy of the deed my Grandmother did deeding the rights to her children. I know I also need to do some kind of paperwork for the County of McClain to get everything transfered over to my name. Just not sure what exactly I need to do. I guess for me, the lease bonus has always been what mattered, I guess because there have never been any royalty payments rec’d on any of the sections my Mother inherited it seems unlikely to me that I would every rec’v any LOL. But maybe it could happen. About 5 years ago another section that I have interest in, Section 30-07N-02W was leased and I rec’d copies of all kinds of court filings for pooling and for drilling and etc, but nothing ever happened. Thank you again for your time and I appreciate you helping me understand that I don’t need to feel pressured to hurry on this because now I understand that even if it is pooled the offer would be competitive. One other question. I have rec’d an offer from another company to lease this but even if they were to offer a better bonus, which they have not done, is it better for me to work with Native since they are the company who is proposing a well?
Robin
Some people prefer to lease with the operating company. Others prefer to lease with third parties if they can get a better lease with better clauses and more money. Each situation is different. To me, the clauses are the most important because they can affect your family for decades.
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