I received an offer for 6-5N-4W McClain Co, OK.
$4000/ac, 3/16 RI, 3+2 $3500/ac. 1/5 RI, 3+2
Just curious if this is a reasonable offer?
Thank you,
K Akins
I would push for $4500-$5000 per acre on the bonus if I were you. Casillas Petroleum paid $4500 and 3/16 bacon in Oct 2017. Also it might be worth reaching out to Warwick-Jupiter as they have been making some great offers to the west of you by about 1.5 miles. Other companies in your area paying higher bonuses than what you were offered include Eagle Exploration. Good Luck!
First offers are usually lower than final offers. Ask what they are doing for 1/4. Also, I never do the two year option and too many things can change in three years. The terms of the lease are much more important than the bonus. The “generic” lease that they will put in front of you will mostly likely need some negotiation to get it more in your favor. The clauses that I look at are no post production charges (no enhancement language), time limit on shut in, no warranty, no use of my oil or gas for free, depth clause, commencement of drilling, and a few more.
I prefer a higher royalty such as 1/4th or 1/5th and a lower bonus because the royalty usually pays more in the long run if the wells are good. If there are multiple wells, then even more reason.