Lease term question


#1

Can someone tell me if $400/acre, 5 year lease with 1/5 royalty sounds like a fair offer? Thanks!


#2

Five year leases and 20%$ royalties are 1950 vintage stuff, ask for a three year primary with a two year option and a 22.5% or 25% royalty. You’ll get it.


#3

Thanks for the advice.


#4

saw you question about this lease. Do you mind if I ask where yours are located and who is offering., I own some in dawson, and they are about to expire. Wondering if I will be getting offers soon


#5

I keep getting letters in the mail for some property in Pecos, haven’t leased it yet. Offers aren’t as high as I would like.


#6

Section 25 in Dawson County. Proto Land Services. They are working with Mosman Operating.


#7

Good Evening, what block? also T_N should be 3 or 4 or 5, that is important to find the value


#8

Good Morning the Block is C-41. I’m new to this, what is T_N? Any advice is really appreciated!


#9

Dawson County Section 41/Block C41/A-904(A is for Abstract)

Denise: Denise/Willard in this case there is no Township involved. Denise your minerals are located in the far Northern part of Dawson County not far from the Lynn County line. On the GIS(Geographic Information Survey) Map I find no production or activity in the vicinity of Section 41.

GIS Map of Dawson County Section 41/Block C41/A-904:

CLICK ON MAP TO ENLARGE

Clint Liles

3toy@suddenlink.net

usflag


#10

The property was in a 5 year lease, that has expired and never developed.The company that contacted us is interested in exploring this area. Hopefully this will work out.


#11

I agree with Mr. Cundieff: 3 year primary lease with a 2 year option to renew, at 25 % royalty. That extra 5% royalty used to be the norm, and it could add up to a large payoff to you in the long term.


#12

Thanks, I really appreciate the advice.


#13

With an offer of 22.5%, is it worth holding out for 25% or would you accept the 22.5%? Do you find that most companies will up the offer to 25%?


#14

25% is pretty much standard - I’ve not accepted anything less for a RI.


#15

Thank you, Ralpr. I appreciate the information.


#16

Lease acreage is (depending somewhat on exact location) was going for around $5,000 per acre 3 years ago. 3 year, 25%


#17

(addendum) in Reeves County, Permian Basin