Just got a lease offer from United Land for $250/a, 1/8 royalty. Does anyone know if this a good offer?
In order for us to help you, you need to provide the county and state in which these mineral rights are located. Lease prices can vary greatly even within a small area, and though it appears by your description these are probably in Oklahoma, there are other states in the country with the same S-T-R description.
Additionally, if you Google "Oil and Gas Leasing Tips" I'm sure you'll find plenty of articles online that will help you negotiate with the lessee in order to get the best terms. In general, you should shoot for at least a 3/16 royalty even if the bonus is greater for a 1/8 royalty. An exception to this might be if the area they are leasing has very little current drilling or leasing activity.
Frederick M. "Mick" Scott CMM, RPL
United Land is offering $225 for an 1/8 and $200 for 3/16 in Seminole County. Personally, I don't ever lease at 1/8. I would rather take a little less bonus dollars and get 3/16.
Scott, it is Seminole cty Oklahoma. Judy, do u think $200 @ 3/16 us a good offer?
It seems to be the "going" rate at least, as nearby sections have been leasing for that recently. However, there are also a few permits for new wells in this section and if they come in nicely it could increase leasing rates for your minerals. They might be finished leasing here by the time those wells come in though.
Silver Creek is the only company who has filed leases in your section or surrounding recently, so there is not much competition for them currently. If you accept $200 I would certainly concentrate also on getting a good lease rather than just a good bonus. Depth clause, no deductions clause, shut-in limitation clause etc. are all good clauses to consider when negotiating your lease. A favored-nations clause (you can easily Google for a definition) is another good clause to shoot for, especially if they have not leased many people here yet, though such a clause is not commonly accepted by lessees.
Frederick M. "Mick" Scott CMM, RPL
The Mineral Hub
Thank you so much.
Regarding your question of "Good Offer" of $200 and 3/16: Your guess is as good as mine. Like "Mick" said "it seems to be the going rate."
You can call the Corporation Commission with your full legal description to see if there have been any recent forced poolings near by. If there were, they can tell you the commissions ruling on bonus amounts and royalty interest.
You can wait a while to see if United's offer goes up, but you run a slight risk that United may stop leasing in a particular area.
Thank you do much