I just received an oil and gas lease paid up. It is in Custer county Oklahoma and the tract is The NE/4, section 35, township 13 north, range 18 west containing 160 acres 40 of which are mine the company is United Land Company and it’s a 3 year lease with 3/16s royalty. They are offering $500 per mineral acre. My cousin received a phone call from a company called bighorn offering $700 but nothing in writing. It’s been quite a while since I leased my mineral rights (Chesapeake was last) I’m asking advice on what I should do in this situation.
A paid up Oil and Gas lease means that the bonus paid up front covers the whole 3 year primary term. No annual rentals will be paid. I’m not real familiar with Oklahoma, but the OCC Well Data Finder indicates that no wells have been drilled in that section. For the most part the first offer is usually not what they are really willing to pay.
However, with that area being considered “wildcat” that offer could be their only offer. See if the bighorn outfit is interested in buying a lease on your acreage and what would be their offer. The royalty is also negotiable, so see if they will go a 1/4, if not then maybe a 1/5. You need an attorney or a landman who works for mineral owners to take a look at the lease form. There are many conditions that can be added to the contract.