My four siblings and I have mineral rights in Pittsburgh County Oklahoma. We have about 30 acres in total that an oil company wants to re-lease. These acres have been under continuous lease for the last 20 years or possibly more. They have yet to drill but continue to pay for the option to do so. They re-new every 3 years and without fail, the rate per acre goes up. In 2007 it was $400 per acre and here in 2010 they are offering us $500 per acre. Unlike any prior year though, they are also requesting an option for 2 additional years at the same $500 per acre. This, they say is due to the current gas market.
i understand the motivation for this – take advantage of a down market. My questions would be:
Is the gas market down as drastically as they are inferring?
Is this a practice (asking for options at the same rate) that is more commonplace the market than in year's past?
Is there typically room to negotiate these matters with such little control over the bigger parcel?
Is 3/16 a relatively typical gas royalty?
Thank you for any replies!