Bonus amounts

We have minerals in Lea Co., NM (12-24S-34E NW/4)We just received a lease offer for $750/acre. Is this in the ballpark for the local area?

Mr. Walker,

It is not only not in the ballpark, your offer isn't even in the same county as the "ballpark" assuming a 1/4 royalty, a lessor favored lease, and a competent operator/lessee. You are in a special situation that allows you to call the shots.

The entire atmosphere in our area has changed since you granted the lease to CPK. In fact, get all you can because this will most likely be the last lease offer you get. I predict that your minerals will be HBP for a long, long, long time. Be aggressive and patient. Deal only with a major company.

Gary L Hutchinson

Minerals Managment

Gary, Thank you for the reality check on what’s happening in the area. We’ll be patient on this.

Mr. Walker -

Gary is right, the offer is waay low.

A friend of mine who is Chairman, President and CEO of a company active in the Permian told me a few weeks ago that acreage in some parts of Lea County go for up to $10,000.00 an acre.

He cautioned that there are areas that are "faulted out" so you wouldn't get much for those lands, but if you are in a good area then the $750.00 is waaay too low.

If it is an offer from a small company or an individual, they may be trying to lease your interests for $750 an acre so they can "flip" the lease for $7,500 or something similarly smarmy.

Hope this helps -

Charles Emery Tooke III

Certified Professional Landman

Fort Worth, Texas

More great info. Thank you, Charles.