I’m new to the forum and have much to learn. My family owns mineral rights in Section 4 Carter County. Continental wishes to renew our lease but is only offering $300 per acre. This is the smallest amount that we’ve ever been offered. They supposedly plan to drill soon but we’ve been told that before during lease renewal. How do I determine the fair market value of our mineral rights in order to make a more informed decision? Thank you for any direction you can provide.
Welcome to the forum! We are glad you are here. There are many section 4s in Carter County. Please give the complete Section-Township-Range location. In general, prices are down this year due to the COVID drop in oil prices. The bonus amount is tied to the royalty. In some cases, folks are lucky they get a bonus at all on a renewal. If you have a current lease with an option to renew built into it, you do not have much room to negotiate. If you had a three year lease with no option to renew and they are offering to renew, then you do have a bit of room to change clauses and ask for a different royalty. If you would share which situation you are in, then we can answer a bit more specifically.
Unfortunately at the moment Continental is the only company that has filed multiple leases in and around 4-3S-3W, so it does not look like you’re going to have many competing offers. And as Martha has previously stated, covid did a number to the oil and gas industry and the leasing market is part of the industry that took one of the largest blows. Lower oil prices, with fewer new production is not the recipe for high lease bonuses in Oklahoma because these shales are very expensive to drill, there are less companies wanting to participate in these wells because to be frank at the moment you cannot justify the expense.