Help with Section 6 1N 5W

I have used this forum a few times a couple of years ago and everyone has always been so helpful so here I go again, asking for help.

I have negotiated a lease for my parents 5.5 acres back in 2017 and 2014. Since that time, both parents have passed away and I have inherited half (sibling also 1/2). I don’t have access to her mail but have received a phone call from Bearcat, correct? Previously, my mother would receive all legal documents/letters/phone calls and give them to me to deal with but no mail/no information! I have been receiving A LOT of notifications (through my email) and it looks like things are hopping down there.

Can anyone give me an amount they think is fair for these 5.5 acres-Section 6 1N 5W? Also, who is Bearcat and are they a pretty good company?

First of all, if you have inherited, then that probate needs to be filed in the counties where you have mineral rights (along with your name and address-also the sibling) so you will get the mail that is due to you. That way you will not miss important things like pooling notices.

Bearcat frequently leases for Continental, so they do what CLR tells them to do. If the lease was executed in 2017, then it probably won’t expire until 2020. Check the wording and see. Why are they talking to you now? Call and find out, but I would not do a top lease at this time.

M Barnes, I spoke with him on Thursday and he’s wanting a top lease. I do appreciate your response and I’m in the process of taking care of the legal side but unfortunately, legal problems never get solved very fast.

Again, thanks for the info!

What does Top lease mean?

I am not a particular fan of top leasing. I prefer to let my leases expire by their own terms and then lease again at the prevailing rates in the new time frame.

Here is an article on the issues regarding top leases. An Overview of Recurring and Related Issues Involving Top Leasing.pdf (210.2 KB)

I wouldn’t top lease. You miss out on other companies wanting to lease your minerals, which they can get competitive and give you a better lease bonus and clauses in your lease. I always take the 1/4th royalty

You “might” miss out… Not all top leases vest so it is possible to lose out on “free” money. Just another gamble in the oil business.

Agree. I don’t understand the mentality of not top leasing on purely a concept basis. You could get the same terms of an expired lease and if the top lease fails, you still get a little extra for trying (often times, the reason for why the top lease even presented itself compels operators to do something to satisfy the potentially expiring acreage in which case, you don’t get anything extra if they do that). If someone is top leasing it means they are likely trying to gain leverage and could even pay more than a regular lease. But of course, like Todd said, it’s a gamble on whether you think the prevailing rates at the end of the term are going to be higher or lower than the terms offered on the top lease. The near term future for O&G leasing rates doesn’t appear very appealing at the moment as rigs continued to get laid down.