Have received a lease for mineral rights at Loving County Section 71. Block 1 area. We have been going thru the info and its for 6000.00 a acre with a 1/5 royalty. Is that a going rate and also does anyone understand the warranty to defend title clause. Just received and trying to get knowledgeable about the agreement.
Lease prices have increased dramatically in that area over the past year, and while the bonus price sounds competitive, there may be more on the table. Your royalty on the other hand definitely has room for improvement. A 1/4 royalty rather than a 1/5 is more of the norm. As for the warranty of title, the landman should not have an issue with you requesting to remove that from the lease, and I think it would be to your advantage to do so.
You might consider reaching out to the forum sponsors to see if they have insight on what the high lease prices have been in that block. The more eyes you can get on that property the better.
Best of luck on your lease! That is a great area!
Thanks you for the Info Wolfcamp. I thought the 6000 was fair but was thinking about the 1/4 instead of the 1/5 and removing the warranty .
You helped confirm my thoughts on those items
Just to clarify, the offer to you was $6000 per acre, and not for the entire number of acres, right?
Yes that is correct. $6,000 a acre. In communication with Landman and working out details