My family received an offer by Calvin Energy,LLC for leasing S35,8N,8W Lot 1 SE/4 SW/4. Approximately 80 acres...
It has been in the family a very long time with several companies having leased the land in the past. The last lease dated 1992 was $300/acre & 3/16 IIRC.
I gather from the discussions that Calvin Energy,LLC is probably a broker so what should they expect and what company actually has interest in going back into this section?
Any insight would be greatly appreciated!!!
Rob Clayton
Rob,
Someone is VERY interested in getting in the area. Calvin has filed about 1400 leases in the last 5-6 months in Grady Co. I don't think this is just speculation.
Rick,
I see in discussions that Continental & Conquest have a lot of leases in parts of section 35 & 27...etc. Most average around $750 to $800/acre with 3/16 IIRC for 3 years. I'm wondering who we should approach if Calvin won't come around with a higher offer if we counter to them.
Any advice on what are options are?
Best regards,
Rob
Rob,
What's being offered right now is a bird in the hand. Once some moves are made to actually start drilling the offers will probably go up. The hot spots in s.e. Grady and n.e. Stephens are pooling for up to $1800/ac.
I'm not advising one way or the other but there is nothing that says you have to sign now.
Thanks for the insight! #Michael Hutchison & Rick Howell are both appreciated!!!
Michael Hutchison said:
Rob,
What's being offered right now is a bird in the hand. Once some moves are made to actually start drilling the offers will probably go up. The hot spots in s.e. Grady and n.e. Stephens are pooling for up to $1800/ac.
I'm not advising one way or the other but there is nothing that says you have to sign now.
Rob,
In my opinion: Term, Options, Royalty Interest, Lease language, and appropriate clauses are far more important that the bonus being paid. That is IF a well gets drilled on the property.
If you in fact have 80 NMA, (undivided) you’ll have to weigh the totality of the offer(s) and make a decision that works best for you. With no leases filed yet by Calvin in your section it may be early in the process. Interest may drop all together or it may increase. It is a gamble and frankly they know the game better than we do. So far I have not regretted holding off from leasing early in other areas. Your mileage may vary.
With that acreage, you could even consider leasing Lot1 and not the SE/4 SW/4. That would basically lease1/2 of it now reserving 1/2 for a decision later.