My grandparents (prior to their passing) gifted me their mineral rights in Hughes County and they were deeded into my name about six months ago. This week, I've had an offer to lease one portion from Continental for $350 per NMA and 3/16 royalty, 3 years with 2-year option. I had my lawyer look over the lease, and she made the suggestion to negotiate for gross proceeds/no deductions. I've yet to send the new language to the leasing agent; however, as I am just getting out of the gate, does anyone have any opinions as to A) whether this a good offer, B) how it is doing business with Continental and C) know how the production is in 8-6N-9E? Thank you in advance for your time.
Have done business with Continental Resources. They are negotiable on gross proceeds, depending on who their client is. In my experience, $350 is not bad, but always ask for more. :) All they can do is say no.
There are two Continentals out there. Which one made the offer? Continental Resources or Continental Land Resources? The second one is a broker leasing for someone else.
Do not go with the two year option. Go for gross proceeds/no deductions. Ask what they are offering for 1/5th and 1/4 because there are leases in that section that are getting that. Also, the first offers are usually low to the final offers. Other sections in that township have gotten $400 3/16th. Ask what the spacing will be and what reservoirs they are going for.
Make sure you have a really good Exhibit A with a depth clause, no warranty of title, no post-production costs, commencement of drilling clause. If you need some more help, friend me.
Thank you all! M Barnes, I sent you a request. It’s Continental Land Resources, acquiring land/rights for a client. Does anyone have a sample exhibit, perchance? I want to ensure I’m doing things correctly & not being hasty or uneducated.
Continental Land Resources contacted me early last fall. We agreed to terms, which I don't recall right now, but they never followed through with a lease. Do not know what their game is, but it seemed shady. I would be careful with them.
I agree completely with M Barnes and Mark Benson. Am assuming that one of them will provide you with a solid Exhibit A as M Barnes discussed.
Will Ross, Fawn Hammons ... you can trust these gentlemen's advisement!
I always include specific items in an exhibit to lease, no negotiating that and never do an option. Continental Land is a fairly large broker. Just because you don’t hear back from them doesn’t mean they are shady.