# Lease offer wondering if this is good
**URL:** https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486
**Category:** Gaines County, TX
**Created:** [September 24, 2019, 6:32pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486 "2019-09-24T18:32:25Z")
**Posts on this page:** 20
**Page:** 1
### Author:  [@dgmartin2002](https://www.mineralrightsforum.com/u/dgmartin2002)
#### Post date: [September 24, 2019, 6:32pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/1 "2019-09-24T18:32:26Z")
200 acres total being the east 200 acres of the north 400 acres of Section 15 Block C33 PSL survey. $500/acre 25% royalty 3 years with option for 3 more years. I’m a newbie to this and this forum. What do you guys think of this offer. Thanks
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### Author:  [@James\_Randolph](https://www.mineralrightsforum.com/u/James_Randolph)
#### Post date: [September 25, 2019, 9:57am UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/2 "2019-09-25T09:57:16Z")
Skip the option - unless you get paid again
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### Author:  [@Gail\_E\_Hall](https://www.mineralrightsforum.com/u/Gail_E_Hall)
#### Post date: [September 25, 2019, 2:24pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/3 "2019-09-25T14:24:05Z")
Why is the “option” generally considered a poor choice? Just wondering.
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### Author:  [@James\_Randolph](https://www.mineralrightsforum.com/u/James_Randolph)
#### Post date: [September 25, 2019, 5:14pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/4 "2019-09-25T17:14:52Z")
You are essentially giving a six-year lease for one bonus money.
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### Author:  [@AJ11](https://www.mineralrightsforum.com/u/AJ11)
#### Post date: [September 25, 2019, 9:26pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/5 "2019-09-25T21:26:39Z")
Many would argue that an option is a win-only situation for the lessee. If the oil play/prospect is successful, the lessee can elect to extend the lease at a much lower cost than if it were attempting to buy into a hot area. If the play/prospect is a dud, then the lessee has no obligation to extend. As others have mentioned, make sure your lease forces a second bonus payment equal to the original if the lessee extends the lease. I believe most leases have three-year primary terms and that the options tend to have lengths of two years. I saw that Prestige Exploration Inc. has recorded a number of Gaines County leases in Block C33, including Section 15. You might contact some of the other lessors and try to learn what they received as to bonuses, lease language, etc. The lease you will be asked to sign will most likely be very favorable to the oil company. If you hire an oil and gas attorney, you could win valuable concessions, or the opportunity to lease might come and go while you are haggling about lease language. Your level of risk tolerance will help instruct your next steps. Have your minerals ever been leased?
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### Author:  [@Rick5](https://www.mineralrightsforum.com/u/Rick5)
#### Post date: [September 25, 2019, 9:27pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/6 "2019-09-25T21:27:30Z")
In my experience with options to extend, you are paid the same bonus twice. Once for the first three years and another exact same bonus for the extension which I thought was typically two years.
If you need a good attorney I would recommend Patrick Flueckiger of Austin.
From my experience, attorneys typically don’t agree to extensions. They will, however, get you a much better bonus rate than $500 an acre. 25% Royalty is good, however. That is fair.
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### Author:  [@Gail\_E\_Hall](https://www.mineralrightsforum.com/u/Gail_E_Hall)
#### Post date: [September 25, 2019, 10:01pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/7 "2019-09-25T22:01:32Z")
Thank you for your response.
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### Author:  [@dgmartin2002](https://www.mineralrightsforum.com/u/dgmartin2002)
#### Post date: [September 27, 2019, 3:10pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/8 "2019-09-27T15:10:35Z")
So 500/acre is low? This is Prestige that is offering. And no, have never leased these rights before. GIS shows a few dry holes in the vicinity. Oil wells 2.5 miles to the north. And some gas 2.5 miles to the south.
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### Author:  [@dgmartin2002](https://www.mineralrightsforum.com/u/dgmartin2002)
#### Post date: [September 27, 2019, 3:53pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/9 "2019-09-27T15:53:07Z")
I’m new to this oil lease business so thanks in advance for your patience. How would I find and contact other lessors of this Section? So do you believe $500/acre is low? This is Prestige that is offering. He expressed fear of block busting and wouldn’t reveal his client. And no, I have never leased these rights before. GIS shows a few dry holes in the vicinity. Oil wells 2.5 miles to the north. And some gas 2.5 miles to the south. Any help is greatly appreciated. Also I shot a note to the Austin Attorney on his website, haven’t heard back yet.
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### Author:  [@AJ11](https://www.mineralrightsforum.com/u/AJ11)
#### Post date: [September 27, 2019, 9:53pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/10 "2019-09-27T21:53:37Z")
PS 200 acres is a lot of minerals and it would behoove you to have an attorney help you with the lease. Please see the [Oxy Leasing In Gaines County](https://www.mineralrightsforum.com/t/oxy-leasing-in-gaines-county/35149/19) thread.
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### Author:  [@AJ11](https://www.mineralrightsforum.com/u/AJ11)
#### Post date: [September 27, 2019, 9:53pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/11 "2019-09-27T21:53:49Z")
@dgmartin2002 Go to [courthousedirect.com](http://courthousedirect.com) and search Prestige Exploration as Lessee. Then look down the list of those who leased to Prestige. You could purchase some of the recorded documents for addresses and search the individuals on the internet and see if you could get any useful information. I mention Prestige because I believe it has leased in your section. [What is the name of the company with which you are dealing?] My opinion is that you may have a hard time getting more than $500-$600/NMA bonus. I believe Devon leased thousands of acres to Ring Energy a few years ago for around $500/acre. If you own the surface and the minerals, you are in a better position. If you own the surface, I would definitely recommend having an oil and gas attorney look over the proposed lease. Don’t want to give away water, surface location, disposal well, etc.
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### Author:  [@dgmartin2002](https://www.mineralrightsforum.com/u/dgmartin2002)
#### Post date: [September 27, 2019, 10:05pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/12 "2019-09-27T22:05:58Z")
I only have a 50-acre share of the 200.
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### Author:  [@dgmartin2002](https://www.mineralrightsforum.com/u/dgmartin2002)
#### Post date: [September 27, 2019, 10:10pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/13 "2019-09-27T22:10:40Z")
It is Prestige that I’m dealing with. And was thinking all along that it was an OK offer due to lack of activity around it.
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### Author:  [@Rick5](https://www.mineralrightsforum.com/u/Rick5)
#### Post date: [September 28, 2019, 11:50am UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/14 "2019-09-28T11:50:15Z")
I concur with AJ11 on using Courthouse Direct for research. There is a fee for using it, however.
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### Author:  [@Rick5](https://www.mineralrightsforum.com/u/Rick5)
#### Post date: [September 28, 2019, 11:59am UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/15 "2019-09-28T11:59:30Z")
In my experience, 50 net mineral acres is a lot of acreage. Typically, an offer on the lease bonus and extension are negotiable. In the past, the dry holes may have been vertical wells. Nowadays, our wells have all been horizontal wells drilled.
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### Author:  [@Susan\_Quinn](https://www.mineralrightsforum.com/u/Susan_Quinn)
#### Post date: [September 29, 2019, 12:57am UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/16 "2019-09-29T00:57:30Z")
That is not true. I was paid the same bonus money for the two-year option as I was paid for the first three years of the lease. I was paid BOTH times — same amount for 2 years as for three years.
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### Author:  [@Gail\_E\_Hall](https://www.mineralrightsforum.com/u/Gail_E_Hall)
#### Post date: [September 29, 2019, 12:44pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/17 "2019-09-29T12:44:52Z")
How did you find out the oil company was picking up the option to continue? My first three years is up today. Now I’m wondering if I need to call or just let it be till someone wants to lease again.
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### Author:  [@Susan\_Quinn](https://www.mineralrightsforum.com/u/Susan_Quinn)
#### Post date: [September 29, 2019, 1:57pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/18 "2019-09-29T13:57:19Z")
I simply received a check in the mail—no contact. They did not have to have my permission—that was in my 3/2 contract. If it were me, I would call. If they have produced oil on your lease, the lease is still in force. If they did not, they will have to pay you for the additional two years.
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### Author:  [@Gail\_E\_Hall](https://www.mineralrightsforum.com/u/Gail_E_Hall)
#### Post date: [September 29, 2019, 2:26pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/19 "2019-09-29T14:26:04Z")
Thank you for your input.
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### Author:  [@Erin\_Sigler](https://www.mineralrightsforum.com/u/Erin_Sigler)
#### Post date: [September 30, 2019, 2:24pm UTC](https://www.mineralrightsforum.com/t/lease-offer-wondering-if-this-is-good/51486/20 "2019-09-30T14:24:32Z")
I am curious because our lease expired in March and I contacted J Cleo and they told me they were not renewing the lease. I really would like to lease it out again, but do not have any offers.
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