Lease offer 4-6N-3W, McClain County

I had leased this tract in 2018 for $1000 and 1/5th royalty x 3 years, now expiring. I have been approached by Reef Petroleum to lease for $250/nmi and 1/5th (vs $500 and 3/16ths). When I informed the landman that I was aware of the Nov. 1, 2020 information from the Mineral Owner Registry said that the average lease bonus in McClain County was $2350, he said that there had been a big downturn in activity during the pandemic and companies were not able to offer as much. While this sounds plausible, I don’t want to be taken advantage of. Advice appreciated.

I hate to tell that the mineral owner registry is the fraud. It is a giant scam. DO NOT send them any more money. If your contact information is in the County Clerk’s office records the land people will find you.

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Thanks so much for responding and the info. Any other thoughts welcome.

In general, most of my offers have been lower this year as the competition is lowering offers in my areas. (They could offer higher, they just choose not to because the competition also chooses not to.) I usually look to the nearby pooling orders within the last year to get a feel for the “new normal” if in the same reservoir. Sections 6 & 7 were leased for $2350 @ 3/16th, $1000 1/5th, $500 1/4. The sections are not contiguous with section 4, so may not be a direct comparison. They were in 2020. Native has a pooling in Section 5 which is pending for 2021. That would be a better comparison as soon as it is finished.

“Casillas Petroleum Resource Partners LLC, Native Exploration Holdings LLC, and Acacia Exploration Partners LLC—Anadarko basin portfolio companies of Kayne Anderson Energy Funds, have been consolidated to form 89 Energy III LLC, Kayne Anderson said May 20.” Since Native is part of that group, priorities may change on which sections will get drilled.

Thanks SO much for your kind and thorough reply. This is very helpful.

Unless you need the bonus money right now, you may want to consider waiting. WTI is over $80 and Henry Hub gas is well over $5.00, so their economics have changed a great deal. Watch where they are trying to steer you bonus or royalty. You should shoot for a 1/4 and push hard for as much bonus as possible. This assumes that you do not have a timeline. I own in several tracts throughout this area; although, I am leased and producing in all cases.