We have been offered 225 an acre at 3/16 for 3 years in Lincoln County, OK. I am trying to find a Lawyer in Lincoln County to review the terms of the lease. We should possibly receive a copy of it this weekend. Aslo, is there anything in particular I should watch for in the lease agreement, that would be a red flag, things I should stay away from?
Sullivan Land Resources, Inc is the company who made the offer.
Where is the tract ?
32-15N-02E-1-001-00
Hold out for a little more bonus.
I requested a copy of the lease agreement from Sullivan Land Resources, they sent me a copy of their basic lease that they use, what things should I look for to have changed if any?
2646-SLR_JMA_OGL_3yr_3yr_option_11_7_2012.doc (44.5 KB)three year term
hold out for more bonus
3/16th lease minimum
gross proceeds royalty ( before expenses taken out)
Depth clause so that lease only good to depth drilled during primary term
Most if not all these clause have been explained on this board at length.
In case you didn't pick up on Matthew's three year term comment, he means 3 year with no option to renew.
You might also try to contact Reagan Resources to see if they are interested. They have quite a bit of the leasehold in that section. http://www.reaganresources.com/
Thank you both and I will check with Reagen
As I read my comment again, it does not look as I intended to convey it. I don’t want to speak for Matthew. I believe an option should not be in the lease as part of the negotiation process. It would be a deal breaker for me. I “think” that was what he meant when he stated. “three year term” not “he means”
My apologies Matthew.
No worries.
I don't mind an option especially when i don't think the company will get the well drilled. The only thing is make sure the option requires an additional bonus for the additional 2 years.
This has happened to my family on more than one occassion. 3 year term, two year option. Three years and no well. Exercise the option, get more bonus. Two years, still no well. Lease again, more bonus.
More bonus is never bad.
The option does not mean they are going to release but is does mean your not going to have a chance to get more for you lease at the end of three years if they get some good wells in the three year of the lease. I would not do them .
No it does not mean they will re-lease.
If you can get the company to remove the option clause you are better off for sure, I agree with Ron on that point.
If we do a renewal option would it be best to have it set to renegotiate the price per acre?
I doubt they will do that and besides they are not saying they will release so it would be pointless. Contact Reagan and see what they have to offer.
I contacted Reagan and the individual I talked with stated they were not leasing in that area at this time.
Contact Universal Land Services.
what section are you in because I would say that 225 is a good price when I am seeing 125 most every where else.
We are in section 32-15-2
Natalie,
How many net mineral acres do you have?