Lease renewal primary to secondary

I own surface/mineral rights NW of Three Rivers, Live Oak county and signed a lease in Dec/08 for 3 years with a 2 year renewal option. I signed cheap in relationship to current offers and wished I held out but the oil company came in before Eagle Ford was big. In the 2 year option, will I be able to negotiate better terms and higher/acre payments if the primary lease does not spell out the renewal terms? Am I forced to honor the renewal ?

Unless they drill by December of this year, it sounds like you effectively entered into a 5-year lease with two defined bonus payments (one in Dec '08 and one in Dec '11) owed to you… Given what current-day leases are now going for in Live Oak County, I’d at least show your Lease document to a good oil & gas lawyer for his/her legal opinion. Good luck – and hope that they get good production, and soon! Are you getting any oil & gas pipeline offers down your way?

Thanks for your response, Andy. Yes, I just signed with Pioneer to place a gathering pipeline across my ranch at 300.00/rod but I have a favored nation clause in it where I will receive whatever the highest landowner receives for the section of gathering line. The line is 1-12" and 1-8" laid besides each other on a 40’ easement. Is this a fair amount?

That sounds like a pretty clever contract clause – many thanks! As I hear more on pipeline prices, I’ll let you know… I hope others will let us know about their offers and negotiated amounts.

My family and I received more than Mr. Crawford, but they wanted and received a 50 foot easement with a 12 inch and 24 inch pipe. Tried to have the favored nation clause added and was unable to.