LEASE PRIMARY TERM and OPTION

I don't think signing a lease with an option is a good idea. If you're in Reeves, you can easily say no to any such request.

Think about it like this. You're granting the landman / lessee a free option. If, at the expiration of your lease, they have not drilled, then the landman / lessee will exercise the option to renew the acreage if lease bonuses in your area are at or below the lease bonus that he owes you. But if the lease bonus rate has crashed such that market rates are lower than your contracted lease bonus, then he will decline to exercise the option. You are effectively agreeing to a scenario where the landman will only exercise the renewal option if he can do so at an at-or-below-market rate.

Whenever I am in your shoes, I decline to grant a 2-year renewal option and instead take my chances renegotiating a lease at the end of the 3-year primary term. Has worked out extremely well in the past.