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My neighbors and I recently received offers to lease from Walker Land & Minerals, Inc out of LaGrange, TX. We are trying to educate ourselves on how to respond. The offers seem to be fairly generous, but having read quite a lot of comments on the Internet, now I am very concerned about the details! I do not want a drill rig on my land but would obviously like to take advantage of any oil production if that is possible with that caveat.
I have roughly 24 actual acres of land and my neighbor has 57 acres adjacent to me. The offer is $800 per net mineral acre for 3 years plus a 2 year option. (Both of us have 12.5 % mineral ownership), and there is a 1/5th royalty.
My question is how to respond to this offer. To my knowledge there has been no lease offer on these properties for at least 8 years, so I'm curious why the offer is being tendered at this time. Based on what I have seen on the GIS map, there are lots of plugged wells around us and a few active ones, but is there a growing push for more drilling in our area? I have attached a map of my location.
Thanks for any guidance you folks may have!
Hi Manning- I would never sign an extension. That really only benefits the drilling company. Let's say after 3 years the price has skyrocketed and then they can extend you for another 2 years at the cheaper price. Let's say the price plummets after 3 years. The drilling company will likely let your lease expire (not extend) and then try to pick up your acreage at the cheaper price. Either way- an option doesn't benefit you.
Thanks for that advice, Courtney!
I haven't responded yet to the initial offer, so that's a good thing to bring up in our negotiations!
You are most welcome, Let me know if I can be of any further assistance. I worked many years in Texas (both in-house and independent) and I have connections. I may be able to get you a better deal then what was offered. Message me anytime.