Lease offer

I received a lease offer on some property in Lea County - S11 T16S R37E and S14 T16S R37E.

They are offering $750/acre bonus and 25% Royalty for 3 yr + 2 yr Option.

Does this sound like a good deal?

Not a good idea to go with an extension IMO. We signed a lea county lease recently for 2k pnma. I’d ask for a higher lease bonus, Mark.

Good Luck.

I concur with the no extension

BUT there are a lot of other things you must look for in a lease. I just hired an attorney and had him look it over. But we needed an OG attorney for other family work, so it made sense.

Most leases are written in the favor of the oil company/land man - NOT YOU.

No hold out, no paying for expenses involved in the drilling - all sorts of things like that unless you are very knowledgeable with leases, it pays to have a third party that works for you go over the lease. An attorney could cost you as much as $500/$1000 but it could save you hundreds of thousands when they drill.

It's not JUST about the lease time frame (3 yrs no ext) or about royalty (20% is good, but 25% is better) and yeah, the BONUS is very important. I talked to a land man in Roswell of all places and he was had very good advice.

I already gave you the first (no ext on a lease) and the other piece of advice he gave me is that bonus number on a lease should be in the $500 - $1200 pnma range. So $750 is ok, but I would ask for $1200 and be willing to accept $1000. As long as you are happy with the rest of the lease, that's where I would be.