Having been offered a top lease for what appears to be a low amount from reading the discussions in the Grady County Mineral Group, I am curious to know what price range for the bonus and royalty interest is reasonable based on current activity in the area for a three year lease. Also, could someone explain what wording would be used in requiring a depth clause and what would be a reasonable limit on shut in time in the lease. With a little over two weeks until the present lease expires, would it be prudent to wait until it does before signing?
Thanks in advance for any information specific to this area.
Nancy
Nancy,
Absent any notifications from the OK Oil and Gas Commission regarding applications or orders, you owe it to yourself to wait 30 days past the expiration date of your lease then notify the lessee that you consider the lease expired by registered mail RRR.
Top Leases are fraught with liabilities for the mineral owner. You may consider a lease extension in listed circumstances but top leasing is a gamble a mineral owner can't win. Your best option in Grady Co. is to let th lease expire then find out if regulatory applications are eminent. If they are, current leasing options may be 3 or 4 times top lease promises.
Many professionals on MRF will be happy to provide you with information regarding applications after your lease is officially expired. Until then the variables are too many to get sound advice. If no regulatory actions are apparent, then focus on new lease provisions that meet your needs. Hundreds of thousands of dollars will be at stake if you over look your potential for long term income and concentrate on bonus.
Gary L Hutchinson