Hello I received an Amendment and Ratification of Oil and Gas Lease to extend the term of the original lease. They are offering $300 per net mineral acre. #1 is this a fare amount at this time? #2 what is a net acre? Isn’t an acre an acre? Thanks for any input.
If you own 100% of the minerals in a 100 acre tract, then both the gross acreage and the net acres are 100 acres. If your parents owned 100% and had 5 children who each received 1/5, the each child owns 20 net mineral acres out of the 100 acre tract. A lease bonus is always paid on the basis of the net mineral acres which you own. I have no knowledge of lease bonus rates in your area.
Thank you for the explaination.
Before I signed an agreement like this, I would consult a legal professional with experience in the area. There is a chance that they want to amend your original lease terms which might mean that you should ask for more money than a standard renewal.
Also, I would suggest looking at recent development in the area of your lease. If your intent is to have your lease developed, there might be a company that is more likely to develop your property rather than a company that is only interested in perpetually leasing it.
There are a lot of details that are missing in this post, but $300/net mineral acre seems low.
Thank you for your input.
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