We have a current offer of $2000 per acre to lease with 3/16th? How would I go about seeing if another company wanted to make a better offer? Who would I contact?
Thanks!
Mark- If your contact information is correct with the County Clerk, companies interested in leasing your interest will get in touch with you. Don’t be in any hurry.
I’m just trying to figure out if I should take the current offer or get another offer from someone else.
Who was your offer from? If it was from one of the operators in the area there’s a good chance that’s the going rate for the area. If there are any non op’s in the area they tend to pay slighter higher.
It was from a landman from a company that I’ve never heard of.
The bonus is not that important in the big scheme of things. The royalty and the clauses in the lease are the most important as the production can last for generations. Most leases need negotiation to get more in favor of the mineral owner, not the operator.
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Thanks M_Barnes! What type of clauses should I be trying to ensure are more favorable to the mineral owner?
You need to get the draft lease from the landman and then work from it as there are no “standard leases”. Each company may have their own, but it will be in their favor and not yours. I am not an attorney and not giving legal advice, but the lease clauses that I watch carefully are to limit the royalty clause to no post production charges at all, limit the shut in clause, watch the acreage in the Pugh clause, do not allow free use of my oil, gas and water, no warranty, need a depth clause, a commencement of drilling clause, no option to renew, no top lease clause and several more. You have to work with the draft lease and then have a good Exhibit A to correct clauses that need to be changed.
Doing you own lease form without good legal help is not a very good idea. The lease terms may hold your family for generations. A good attorney will be up to date on the current lawsuits, any wording that needs to be carefully crafted, etc.
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Take a look at Oil and Gas leases that have been filed with the County Clerk. Pay attention to those that have an attached Appendix A. Those usually have wording that is favorable to you. Generally a short Appendix A or none is a lease that gives the Oil company freedom to take advantage of you. Remember it’s the Wild West in the OKLA Oil market – be careful and knowledgeable of what you sign.
Is there a good template available for copying which as all of the the owner friendly provisions in it?
So very interesting. The original offer was some company called Zodiak Ventures, Aaron Shiff, was the guy’s name. They confirmed by email after speaking with them by phone that we would be receiving $2000 per acre with 3/16ths for me, my brother, my mother and sister. All together we own about 100 acres in that particular section. Told us the lease had been mailed out and then BAM…they went dark. My Dad called them and followed up and they were adamant that the lease had been mailed. I followed up as well 2 days later… it’s been mailed they said. We are at 2 weeks and nothing has shown up and they aren’t returning emails or phone calls.
What a bunch of worms. Be very very cautious if you get a call from these snakes. They are liars and have no integrity to even make a phone call stating that the offer has been rescinded.
This may turn out to be a benefit for you. Many of us prefer a 1/5th or 1/4 lease. 3/16ths is actually low. Remember that the clauses in the lease are so much more important than the bonus amount. Those clauses can hold your family for decades. The draft lease that is sent is usually not what you want to end up with. Red Rocks was offering 1/4 leases in section 32 earlier in the year. With 100 acres, you may want to get an oil and gas attorney to look over that lease.
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If their first offer is $2,000 – It almost always low, and be sure and get more than 3/16 Royality. Many offers are in the $6,000 area in Grady County. I can’t say I know what is average for your area however. Just saying I would ask for more than $5,000 and at least 1/5. Since you control 100 nma acres you can ask for a better amount.
Be aware I am not an attorney, just a Mineral Owner, my advise is not based on any knowledge of your specific area. Whatever you do; get a some wording added to the lease in your favor. No renewal, No reductions in Production amounts. No warranty. Limited shutin. etc etc…
If your area is hot, and you have your address correctly filed with the County Clerk you will be getting calls from other landmen. Don’t be too quick to do a deal. Again only my thinking - OH – I have been wrong many times before…
Look at recent OGL Leases signed in your area in the County Clerks records. Find out who the company was that did the deal — note the Royalty amount -and the Exhibit A attachment- the Bonus won’t be in the lease.; and give those companies a call to see if interested in your 100nma.
There are several things you can do to get smarter to deal with these guys — if you go to the Clerks office you can look at the records for free… Take your camera, many Clerks now allow you to take your own pictures of the records
Thank you for your response!