I have an three-year lease which includes interests in Section 1, Section 12, and Section 13, which expires on January 1, 2017. A landman representing the leasing company has contacted me about my interest in taking the two-year extension provided in the contract. He has said that little activity has been happening in Lea County in the three years of the lease. He seemed to indicate that they did not have a strong interest in exercising the extension and wanted to get my thoughts on it.
The extension provides for $200 per acre bonus, with 3/16ths royalty. Can anyone provide me with some information to assist me in making the decision whether to extend for the two years or let the lease terminate. I am under the impression that is the best deal that I would get. I am aware that there have been richer leasing contracts there, but not sure what the market is these days. So, would it be to my advantage to request the extension at contract terms. I do not live in the area, so I am not familiar with the environment in the county these days.