Good morning to all,
My lease agreement with an oil/drilling company was for a term of 3 years and written in 2009. Thus, it has expired. Should I contact this company to renew the lease? If so, should I request cash bonus money like we were paid on the initial signing in 2009?
Thanks for your help,
Mary in Oklahoma
Mary:
In my opinion, you should just wait until you are contacted. This company is most likely very aware that the lease has expired and for some reason, they elected not to renew the lease. Landmen representing various operators, stay in the County Clerk's office researching records on minerals that are expired or nearing expiration dates. If your minerals are located in an area that is active, you should be contacted in the near future. In the meantime, do your own research and learn the current lease rates in order to be prepared to properly negotiate a new lease. Don't take the first offer without conducting your own research.
Charles,
Thanks for the information. I'll wait and see if they or some other company contacts me. Mary
charles s mallory said:
Mary:
In my opinion, you should just wait until you are contacted. This company is most likely very aware that the lease has expired and for some reason, they elected not to renew the lease. Landmen representing various operators, stay in the County Clerk's office researching records on minerals that are expired or nearing expiration dates. If your minerals are located in an area that is active, you should be contacted in the near future. In the meantime, do your own research and learn the current lease rates in order to be prepared to properly negotiate a new lease. Don't take the first offer without conducting your own research.
Mary,
I like to contact the prior lessee and talk with the land department. Many times I have done this and they leased the tract again. If your not in an area where there are many companies sending you lease offers then the previous lessee maybe the only one in the area leasing. I have called, leased my minerals again and got bonus money when no one else got anything by sitting around waiting, some of those leases have expired again and the other mineral owners got nothing during that time. If you would have said where your minerals are exactly, at least said the county, I could have told you if more might come knocking or if it might be better to call the prior lessee.
Perhaps all my cases were a fluke and so the 10's of thousands I got the others are still waiting and hoping on, but it's not always about the lease to maximize proceeds as many times there is never any drilling and the only money made was in the bonus. Maximum proceeds from a given asset over a given time is the key. It does help to be active in your mineral ownership like Charles said.
Chuck,
What I think would be a great asset to the mineral owner readers is someone like you having held the position you have with a major to share with us the experience and knowledge, to tell everyone just how to drive the best lease terms with a major from an inside perspective.
Dear Mr. Hallbert,
Thank you for the kind words.
Chuck Hallbert, CPL CMM said:
I have been very impressed with what I have found on this site. I’m sure there are many more, but the first comments I noticed were Mr. Cotton’s. Wow! I could learn a lot from a guy like that. I’ve never met the gentlemen, but he gives some really sound advice.
Cheers,
Chuck