Is there a form letter to send to a company replying to a request for options on a lease? And what to ask for and accept from them?
Your question is too vague because different states have different clauses due to their statutes. You can request a draft lease and then highly recommend that a good oil and gas attorney for your state review the lease. Most savvy mineral owners would want the highest royalty and no post production charges among about 20 other important clauses, so get that legal help.
@M_Barnes is spot on. I respond in general and simply tell them they need to improve the offer for a serious consideration. This may start a negotiation without you stating a max term requirement.
What some people think is that the oil company “Will or Has to pay the option term”! It is the companies choice to pay it or not pay it or try to change the option term for a lesser amount and longer term. It’s best to not accept an option term to begin with. You can tell them that if you want an option then just pay me for a longer primary term. 3 year’s is long enough.
I recently leased our rights. They offered $750 per acre for 3 years, with an option for 2 more years for $750. I suggested they do $1,500 for 5 years, but they wouldn’t go for it. Time will tell, as the 3 years expires in 15 months from now. I am happy with the deal we have. Now that I am more familiar with the industry, I feel like we are better off with the 3 year as opposed to the 5 year. On a 3 year, the energy company has more incentive to drill sooner than later. On a 5 year deal, the drillers can hold off on mine while they drill on someone else’s rights that has an earlier expiration date. Since we live 1,000 miles away, and don’t have property tax (we own minerals only, not the surface), it is just an unexpected blessing for us. If/when they drill and hit, it will be “manna from heaven.” I suggest you go with the 3 year lease.
You say that the 3 years expires in 15 months, but did you sign the 3 yr OGL with the 2 year option, the offer that you stated? If so, then the company still has the option to pick up the OGL for another 2 years at $750 an acre
we hired a mineral attorney from the beginning. I knew enough to know that i needed one. in the end, the lease he negotiated more than paid the lawyer fees and the royalty % and depth level agreements were far more than i could have handled on my own. Everyone is different so just relaying my experience. note: this was after my uncle said " well all you have to do is …"
Can I ask how many acres and where it is located? This might help me determine if I have enough to get a lawyer as well. I don’t know anything about this and I’m trying to educate myself quickly. TYIA