I have been sent a lease offer that appears very low and for too long of a duration. Can anyone tell me what I should expect for a god offer? The property is Township 35 N, Range 4 W, Section 9: NE, E2, NW, N2SE, Section 10:E2 (640 Acres)
Offer: $15/acre for a 5 year lease with an option for a 2 year extension at $10/acre. Royalty 15%.
DAVID,
Your sections are surrounded by good, long term gas wells. At the prices offered, I think it is much more important who you sign with than what you sign for. I would only lease to the operator and make sure you understand the measurement and payment of royalty. If you own all the mineral rights, you are in the drivers seat to get what you want so protect the long term income, Split up the sections, and take very short term leases.
This is not exploration but development drilling so be careful of HBP constraints.
Thanks Gary. The offer was from SOG. We have 100% of the minerals split between my partnership and two of my cousins. each having 1/3.