My mother-in-law received a lease agreement for an interest in mineral rights that she received ownership of after my father-in-law passed away. She was ready to sign before we asked her to do a little investigating, given that she has a limited income and many years left to live. I’ve taken it upon myself to learn about mineral rights, oil and gas leases, and the process of negotiating them. The more I educate myself, the more questions I have and the more uncertain I am of my ability to better her part of the agreement. Specifically, she owns ½ of a ½ interest of 40 acres in Logan County, Oklahoma. (She owns several other interests, but this is the only one for which she has received a lease.) The landman has offered a 3-year lease, offering her $150 per acre for a total of $1500 in bonus payment, and royalties of 3/16. Additionally, the lease offers a 2-year extension with a 150% bonus payment due if exercised. The landman indicated that both the bonus payment and the royalty percentage are standard for pooled leases in Logan County. I’ve researched both the landman (T.S. Dudley) and the company that they represent (Devon Energy) and am confident that I’m dealing with professional organizations, but I’m not ready to take the word of a man who is not representing my mother-in-law.
So far, I’ve told the landman that we would like to delete from the contract the warranty clause. I may also ask that the extension provision be removed, as well. As for the monetary considerations, I am at a loss as to how this thing stacks up against similar leases nearby. I’ve looked at the group forum here and found that there is not a Logan County group. I’ve also looked at groups for adjacent counties and found that those are inactive. I’ve also spent a good deal of time on the Oklahoma Corporation Commission’s website but have found little useful information. Can this forum offer some guidance? Is $150/acre and 3/16 fair? Thank you and sorry for the long post.