I just received an offer to lease for bonus of 275 per net acre, 3/16 for 3 years. The bonus seems kind of low to me. Anyone have any news or ideas? Thanks!
It is active. A couple of mineral deeds were recently executed in that township. It is also where a lot of the earthquakes are happening. The worst of your problems isn't the royalty or the bonus. The post-production expenses within a few years will be 50% or more and you will effectively get less than 1/8th. Courts are siding with the oil companies on this, so you are screwed if you don't get an insanely high royalty or bonus. If you have a Pugh clause after your lease expires they will pool you again below the zone they are producing and cut you back to 3/16th or less again.
I would rather have a 1/8th royalty with zero deductions - not transportation, not compression, not anything rather than a post-production lease. Also, they ought to pay you on the GROSS production from the well head not the NET production sold to the end user in BumFuzzle, Egypt. Compressors use a lot of gas and the longer the lines, the more line loss. I have a client who is a charity and 2 of their wells have "negative" royalties. They actually "owe" the oil company money because post-production expenses exceeded 100%. They are not working interests either, but are straight royalties. Join NARO.