Just received a call from CGS Operating; not yet have responded. I believe they are wanting a lease for minerals. I have some there. Just wondering what the going per acre in that area now is. What term would be reasonable for that area also? The area is League 300 SE, I believe. Any help would be appreciated.
Search the MRF forum for other threads about leasing in Gaines County and Dawson County like this Gaines County Labor 5&6, League 295, A-815 Mineral Right Lease - #14
Just received an offer for Gaines County for 15 net mineral acres. $500.00 per net three-year primary, 3 years to extend with $500.00 net acre with a 20% royalty. Acreage is located Block 9 League 300 Terry School Land. This offer was from CGS Operating, which I understand is hopeful to flip this at a better price. However, best I can see is 25% a better rate. And I understand it would lock me in at 6 years. However, I have not had any interest in this for many years. Wouldn’t it be best to take what they offer and take my chances rather than lose the offer down the line? Any help would be appreciated. Thanks.
If you are risk intolerant, could use the $7,500 bonus, and don’t mind your minerals being subject to what I am assuming is a highly favorable to the lessee “producers” type lease, then your outlined plan of action may be a good course to follow. I have twice had a deal evaporate while pressing for better terms—not exactly fun times. Just my two cents.
I just signed a lease in Section C32 (north portion of Gaines County) for $500/acre for 3 years at 25% royalty with Prestige Exploration. I had a board-certified oil and gas attorney in Houston (Eric Lindahl with Williams & Lindahl, 713-463-6700) look over the lease for me. He helped me understand the terms - it was highly favorable to the lessee - and proposed changes to make it less favorable - like adding a Pugh clause, but unfortunately it was a take it or leave it deal. At least I know what I signed up for. The area is not as hot as other areas so it seems the bonus payments are more modest.
Thanks, noticed not hot area. I guess I will ask if there is any wiggle room for this one. Like a Pugh clause. If not, will probably give it serious thought.