Our lease is up in sept and have been contacted by 2 new lease companies. Should we negotiate with them or is it better to contact the producer directly? We are pretty new to this. We signed with first company 5 yrs. ago and did not do much research and ended up with samsom. We have 2- 40 acre section adajacent to each other. Would it smart to hire an attorney ? Any help would be appreciated.
Cam, in your place I have had more luck in dealing with all of the companies and asking still more companies if they would like to join the party. Mention to everyone that you have multiple offers, it may not start a bidding war but it should at least make them get to their best offers quickly.
I do think it wise to have a lawyer, one you trust and who will give you his advice on more than whether the lease is legal to sign or not. If a lawyer reads a lease and just hands it back and says you can sign it, you wasted your money, and many lawyers have done just that and collected their $200 to $300.
Cam,
Since you mentioned a "producer' your land, or part of it may be held by production and you can't lease it again.
If your land is not HBP, read the fine print in the lease you signed. You may be precluded from leasing to anyone but the current lessee if you negotiate a deal before the lease expires. In that case it is best to wait until after the lease expires to negotiate a new one.
Samson has a deal to sell is interests in Divide so the land companies that contacted you may really be working for the buyer in order to extend their rights with out drilling. Don't fall into that mud puddle if you can stay out of it. If you do, you will be giving up profits to others that you will get by waiting. Much depends on the specific drilling activity accomplished in or adjacent to your land.
Get some good advice based on experience in the oil business and don't rely on someone reading and rubber stamping a lease.
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We have a small amount of acreage north of Crosby. In 2008 we got a bonus of $200/acre. In 2012 (DEC) the offer was for $1,000 per acre. when we objected to the renewal option they dropped it to $800/acre 3 yrs.
We have not leased the property.
1. In four years the bonus went from $200 to $800. Will this rate of increase continue , maybe.
The royalties are likely to be small , the money being in the bonus payment.
2. The option clause told me they are not likely to drill right away.
As for Samson I am sorry to see them go. Their accounting system etc seemed a little clunky but I always
felt they were honest. Time will tell with Bakken Hunter.
A place some of this info can be found:
It cost $25.00 per month but you can look at recorded leases. And any other items recorded with the county. Leases do not list bonuses but they do list royalties and term.