Lease Provisions

We own less than 100 net acres in Sec 18, Township 20 N, Range 52 E. Received offer $100/A for 5 year lease plus 15% royalty. Current proposed lease and prior leases over the years are on form: "Producers 88 paid up". (Offer and Lease from Wasaabee Energy)

One of the clauses in the lease provides that lessee has free use of oil and gas produced if used for lessee's operations; this is a strange provision to one not familiar with the energy business. Does anyone see a problem with that clause?

Also, I'd like more royalty - 17.5%? - and perhaps trade off on the base rent. After all what's a few dollars on less than 100 acres, compared to locking royalty in "forever" if exploration is successful.

All comments welcome. Thanks.

More royalty is availble and you are being lowballed on it. 88 lease standard for the industry but you need a Pugh clause and "Shut In" clause on landman should agree to that...if he doesn't, you should shop.