40 acre lease offer Seminole Co. OK


We received an offer from Silver Energy for our net 3 1/2 acre interest in Section 5-7N-7E:NE/4 SW/4 in Seminole Co. We have other operating interests in Seminole Co. My understanding is that this 160 acre (we have 14 net) is being split up to 40 acres to avoid a Pugh Clause. Does that make sense? Offer is pretty standard 3/16 w/ $150 bonus, but has stronger language regarding what constitutes production. Any tips appreciated. We are guilty of signing most leases straight up. Thanks, WSD

You can always(to be ornery) strike the 3/16 and amend it to 1/4, or 1/5 when you get the lease. Whatever you do, add an exhibit A with your own depth, Pugh, shut-in etc.

Tom k5bm@cox.net

2292-OILANDGASLEASEMODEL07042012.docx (171 KB)