Kaye,
There are numerous producing vertical oil and gas wells to the South, Southwest and Southeast of your 2 sections. Some of these wells are 10 years old and still doing fairly well. The 4 blue circles (38175, 38264, 38265, 38266) in Section 3 are permitted locations that apparently were never drilled by Sheridan Production. These wells were permitted in 2014. Well (green circle) 38030 (oil well) shows no production at this time. Form W-1: Field List
The 25% royalty is great…I would counter offer with $600 and negotiate if need be. Also find out if the company is going to drill a vertical or horizontal well in the area. In the lease make sure there is a clause stating there will be no deductions for processing of natural gas, etc. from your royalty checks.
GIS Map of Gaines County Section 2 & 3/Block A12 and surrounding area:
CLICK ON MAP TO ENLARGE