I grew up in Ardmore but have lived elsewhere since college, currently in Oregon. I have some minerals inherited from my parents but am new to this ‘game’. I just received an offer from RD Williams Co. offering $500 per nma for 3 yrs and a bonus of the same for 2 more years. Reading through the comments it seems you actually are signing for 5 years. Some advise declining the 2 years or adding an ‘elevator’ of 150%? Is there activity in this sector? Is this first offer of $500 ‘good’ or below current market? Is it ‘common’ to call and offer to sign for a higher amount and what is reasonable in this market? I’d like to obtain what’s fair but not chase the offer away. I recall Dad telling me to always lease; “a little of something is better than all of nothing”. An help is greatly appreciated. Thanks!!
Great questions! Yes, the first offer is their “best” offer because it’s a negotiation. And there is no reason to rush to sign. The most important things in the lease are: 1-the royalty because it is your long term income, I have finally gotten 20% on some leases and others 22%. Big difference in the long run, 2-an exhibit A addendum that protects you from added costs and includes a Pugh clause which frees other zones that can be leased on your interests. (Good examples of these can be found on this website.), 3-no extension. 3 years from now the world will be different. Your dad is right if you are in a area that does not generally produce good wells. But I think Love county is better than that. Do some research on the above and remember it’s a negotiation. Like selling a used car - they want it for as little as possible and you want what it is worth. RD Williams has always been fair with me. Good luck
Just leased in sect 11 8S 1E @1/5 - 3 Yrs w/2 Yr option for $700
Great info, Rick. Especially the part about the Pugh Clause defining the ‘zone’ being leased. The lease offer ‘appears’ to define the zone as ‘the Marietta Woodford 1-9’, if I’m interpreting this correctly. Does that alone, in the lease agreement, restrict the development to that zone exclusively or do you need to expressly add additional language such as ‘the Marietta Woodford 1-9 exclusively’.?
You need to express that. Search for Addendum A on the site and you will get example of ALL the things you need to specifically include.
Great info!! This site is a gem and a heckuva find. So appreciate the helpful comments from you, Rick, and Darrel. Thanks to all who took the time to respond to me. Very much appreciated!!!