I am new to mineral rights ownership (via inheritance). Much thanks to all with expertise who share on this site. I am attempting to learn essentials quickly.
I have been offered 2 leases by Calyx to sign for my rights on the 2 following tracts:
1) Section 35, Township 19 North, Range 02 East, Southwest Quarter (SW/4) -- which Calyx has filed for pooling order (hearing date March 10); Additional info: Calyx offer prospectus states that this drill will extend horizontally into adjacent tract Section 26
with estimated completion of 45.9 % in Section 35 and 54.1 in Section 26.
2) Section 2, Township 18, Range 02 East, North half of Northwest Quarter (N/2 NW/4) -- no information has been provided indicating that a application for forced pooling has yet been filed on this lease.
I have received 2 separate leases (with identical terms) from Calyx via their landman. I understand that the landman represents Calyx's interests and also presume that these are form leases.
QUESTIONS AND CONCERNS
1. I would expect that there is a market rate or range in Payne County for bonus and royalty payments. Without more knowledge I can't assess if their bonus/royalty offers on form lease are fair. Any guidance appreciated, including thoughts on whether to take higher bonus and lower royalty or vice versa (obviously risks must be factored with potential total return on mineral rights owned).
2. Lease has term length stating 3 year primary term, but language in detail reads as if the 3 years is illusory, that lease essentially has no meaningful deadline if a well produces. See following:
"It is agreed that this lease shall remain in force for a term of three (3) years from date (herein called primary term) and as long thereafter as oil or gas, or either of them, is produced from the said leased premises. As long thereafter as oil, liquid hydrocarbons, gas, or their respective constituent products, or any of them is produced or capable of being produced from said land or land with which said land is pooled; provided, however, that for injection purposes this lease shall continue in full force and effect only as to the subsurface strata or stratas into which such injections are being made, together with such surface privileges as may be necessary or desirable to continue such injections."
"If prior to the discovery of oil or gas on the leased premises Lessee should drill a dry hole or holes thereon, or if after discovery of oil or gas the production thereof should cease from any cause, this lease shall not terminate if Lessee commences additional operations as provided herein within ninety (90) days thereafter, or, if it be within the primary term, then not until the expiration thereof. If at, or after, the expiration of the primary term oil or gas is not being produced on the leased premises, but Lessee is then engaged in operations thereon as provided herein, this Lease shall remain in force so long as operations are prosecuted (whether on the same or successive wells) with no cessation of more than ninety (90) days, and, if production results therefrom, then as long as production is maintained pursuant to the terms hereof."
Any guidance on lease term clause appreciated. Fair? Unfair? I am not inclined to enter into a lease with no reasonable expiration.
Much thanks in advance.