Is a initialed lease offer binding

New to this and trying to understand the legalities of a lease offer.

I received an offer letter that requested me to initial it and return it to the sender, It was the highest offer I has received at that time so I did. After doing this I received a higher offer from someone else that was higher. My question is, is the initialed lease offer binding so that I have to lease with the one that I initialed the offer letter too or can I go with the higher offer?


Not intended as legal advice, but if you did not sign an actual lease that your signature was notarized, then the offer letter is of no consequence.

BUT as always, you should consult with an oil & gas attorney that is proficient in your particular state’s oil & gas and contract laws.

Good Luck.

Where is this interested located (which state)? You should consult with an attorney in the state in which the interest is located. It would depend on that state’s law, the actual terms of the offer letter and possibly other factors.

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Thank you for your response

To avoid any misunderstanding and possible grounds for litigation I advise my clients to not sign off on such letters. While I doubt it would be enforceable, the risk isn’t worth it.

This post is not legal, tax or investment advice. Reading or responding to this post does not create an attorney/client relationship.

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Sound advice. Oil and gas leases are not uniform and it is very likely that any form sent related to this offer will contain unfavorable terms, such as allowing unlimited cost deductions. Lease bonus and royalty rate are only the start of this process.


Outfits who put forth this kind of stuff are generally one of two types:

a. complete rookies, or

b. know exactly what they are doing… playing for the ability to say to the potential Lessee (after presenting Lessor favorable terms for signing), "well sir/mam, you’ve signed your initials here, so you’ve committed to signing our lease.

Don’t fall for it.