We just received a letter from Bearcat Land with a lease offer for our interest in 18-10N-10W Caddo County, Standard offer of 1/5 or 3/16 and bonus. but language I haven’t seen before.
Option 1: A lease term of 3 years, a 1/5 royalty, and a lease bonus of $802 per net acre with a 2 year option at $802. per net mineral acre, or
same language with 3/16 and $1,252 bonus.
Does anyone have any information on this tract, Bearcat Land, who is looking to drill, etc? I obviously want to see the lease offer, but at 2.5 acres, I can’t justify atty fees, and don’t want to battle for favored nation, transportation costs, etc. Would I be better off waiting to be pooled? M.Barnes? Any help appreciated. WSD
Bearcat frequently leases for Continental. Summit Land and Continental have already filed leases in 18 in the last 12 months. Continental has quite a few leases in that township. There are others filing as well, so you might get more offers. You really do not want post production charges which most draft leases have these days. Those clauses can be struck, but not all agents will go for it. Duncan has a rig going in 10N-11W on the west. Mach has a rig going in 10M-9W to the east, so various players in the area.
Personally, I never allow an option for additional years. Puts too much control in their hands instead of market conditions at the end of the three years.
If I cannot get an acceptable fair lease, then I wait for pooling. Duncan has the nearest poolings at the moment, but Continental has a whole big set in 9N-10W to the south.