I recently received a lease offer for Section 30-10 North – 08 West. I was offered $1,000 per Net Mineral Acre s, of which I have 4 total. I was curious whether that was a reasonable offer for a 3-year lease with 2-year extension offered for an additional $1000 per acre if the extension was picked up. Any thoughts from the members would be appreciated. Thank you.
Definitely do not allow the 2year option to renew.
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Your offer is tied to a royalty percentage, so that needs to be included or it doesn’t have all the information. Usually first offers are open to higher negotiation. Many of us would want a 1/5th or 1/4 lease which would have a lower bonus. The clauses in the lease are much more important than the bonus amount. If you have never leased before, it would be wise to get a good oil and gas attorney to review the lease as the drafts need significant edits.
Yes, I should have mentioned that there is a 3/16ths attached to the lease.
The 1/5th and 1/4 royalty will have a lower bonus, but the payout on a successful well over the years will usually far surpass the bonus amount.
No leases have been filed in that section in the last 24 months, so the timing is early in the game and you may get other offers. I always ask about the other options.
Thank you for your reasoned explanation.