I have been tendered a lease in T9N 60E Section 14 in Fallon County, Montana by B. H. Grace, LLC. Can't find anything on Google about this company. Anyone ever heard of this company out of Dickinson, ND? They offered $50 a mineral acre and 15% royalty. I don't know if that's the normal rate. The lease concerns me because they say they will have the right to re-lease if they want.
An option to extend isn't in the mineral owners favor. If the value of your minerals go up the lessee will probably pick up the option on your minerals for a bargain price, but if the value of your minerals should go down, the option will be declined and the lessee may make you a new offer for less money. I would say that if they need nore time they can make a new offer at expiration or if they wanted they could propose a longer lease for considerably more money from the start. You could compromise by allowing them a right of refusal, where they have the right to match the best offer you may negotiate in the future when your lease nears expiration. I look at options as being disingenuine. The lessee is supposed to be offering to pay you for the right to produce your minerals and for a delay in beginning to do so. If the offer said outright that they would like to purchase the right to produce your minerals for a small down payment, with an option to pay you another small payment for a few more years so they could tie up the right to produce your minerals in the hope that their value would increase to the point that your lessee could make a handsome to massive profit flipping your lease to someone else, would you agree to that ? I also think that if the lessee hold an option on your acres at a reasonable price that they will likely drill the acres they do not have an option for first to keep from losing them, so an option may delay getting a well of your own. You do want a well, don't you ?