Lease Offer Dawson County Taylor County School Lands

Hi there - Sorry to bother but I have been reading along with this thread, trying to get some insight for myself. I know 0 about mineral rights, and even less about anything to do with oil. I am a peanut man and know the business inside and out but when it comes to land, leasing, etc - I am in the dark.

To get to the point - I have been approached about some land in Dawson county i was unaware I even hold mineral right to (through my grandfather). To be exact it is 78 acres, East Half (E/2) of the North West Quarter (NW/4) of Section 4, Block 36, Township 5 North, T. & P. Railway Company Survey, A-458, Dawson County, Texas.

The offer from CGS is $650 per net mineral acre for three years. This is a PAID UP LEASE with no obilgation to actually commence any operations during the primary term. Then there is a provision to extend the primary term at any time for an additional 3 years by paying 650 per net mineral acre. Royalties offered are @ 22.5% of the produced.

Anyway - sorry if that is a lot of un-necessary detail. I’m just trying to find a knowledgeable individual who can offer some insgiht into “if this is a good deal” and/or “what can I reasonably expect from this offer.” Also - should i be concerned with any kind of liability?

Any and all information you are willing to divulge is greatly greatly appreciated. I know this is absolutely not your responsibility so I hate to even bother by asking, but I certainly have no idea where to start or who I should be asking .

thank you for your time. - cvs

$650/acre is not too bad…depending on the number of acres. 22.5% royalty is what I have been offered at times…I have always held out for 25%…but to each his own.

I would limit the provision for extension for less than 3 years and additionally ask for 25% royalty. I dont know if you will get it but its a start. At least make the effort in negotiation for less time of the extension so you are able to get an additional lease. Thank you for the info.