Grady County Lease Help


Hello, My brothers and I just found out that we own 7.5 acres of mineral rights in Grady county. Section 22, Township 03 North Range 07 West E/2 E/2 W/2 and W/2 E/2. We found this out when we were recently contacted by a landman representing Sundown Energy. They are offering us $400 per acre and 3/16 royalty. A 3 year lease term. I responded that I thought the offer was low… When I did, the landman pointed out that his company did a lot of work (Affidavit of Proof of Death and Heirship (3)) that would have cost a lot of money to hire a lawyer to do. He asked me to consider this when thinking about the offer. That does make sense to me… Anyway, if anyone knows of any lease offers in that area, please let me know any info that you may have. I’m trying to determine if this is a fair deal. I already read on here that I should NOT agree to “warranty” title - which was standard language in the lease they sent me. I told them I would not agree to that as I have no way of knowing about the title (we are heirs). He said he would see if they could strike that language from the lease. Any comments/advice would be appreciated as I live in Florida and have no knowledge about this sort of thing, except for what I have learned from this forum. Thank you!!


That area of Grady is not in the main play that has had much higher bonus amounts. It is probably going to be deep gas, so will not garner as much at this time. The Force pooling was in sec 17 which received $50 for 3/16ths. If you are new to leasing, suggest you read the Mineral Help tab listed above. The first lease that they offer is likely to be mostly in the operator favor. You want to negotiate it more to your favor so the items I usually push for are a no deductions clause (not an “enhanced” one), a depth clause, commencement of drilling clause, no warranty and a few others.


Thank you VERY MUCH Martha. I am reading as much as I can find on this forum. So far, I have responded and told them (Reagan Resources) that I will not warranty title. I will read over the two page lease and see if I can find a “deductions clause”. I didn’t see anything in there about depth or drilling, but I will look for that also. Thanks again!


You will most likely have to add an Exhibit A which adds the clauses that you want.


Also, check that lease in the royalty clause on the front page. If it says NET instead of GROSS and mentions deductions for transportation, gathering, marketing, etc., then those are post production charges that most mineral owners do not want.


It says “3/16th of the gross proceeds received for the gas sold”. Thanks very much for the tip Martha!