I am totally new to this game… I was contacted this last week for a lease on 40 acres in section 8, twn 1, 19e I’m Texas county, ok… I was offered 3/16 and $500 acre for 3 w/ option to renew for 2 at additional 500… From what research I have gotten to do so far this seems like a average offer… The landman says they have I believe 320 of the 640 acres of minerals leased… Any suggestions??? I do not own any of the surface rights in this section… My surface rights are in the adjoining section… Like I said this is all new game for me and any input or advice be greatly appreciated!!!
Robert:
I'm not sure about the location where your minerals are located so can't help you on the bonus amount. I can tell you that I don't like agreeing to any extensions in leases and 3 years is the max that I will agree to in negotiating a lease. Too many things can happen in an area in 3 years and the bonuses plus royalty may be much higher that at the present time. With an extension in your lease, you will be bound to honor the negotiated bonus/acre and the possibly the same % royalty. Good luck, take your time and understand fully before sighning a lease.
Robert, I agree with Charles on the 2 year extension, not a good idea. Im guessing your complete legal description is Sec. 8-T1N/R19E-CM. I'm not at all familiar with drilling in the Oklahoma Panhandle. The closest thing I could find to you was sec 15 pooled by Strat Land on 7-19-11 for $250/ac. 3/16. Based on that $500 sounds pretty good but maybe you will get a response from someone who knows the area better.
Guys thanks for replies… Like I said total new game for me… Since I got called its amazing how open eyes are to drilling rigs…l my commute to work takes me within about 15 miles of property there are several rigs visible and even more of the turn markers for rigs along highway… Guess I see… Is there a way to word or try to word contract to help shorten time from signing till they start drilling???
Robert,
I saw no evidence on the OCC website that the application process has started to drill your section. The wheels of government turn slowly. Even if a drilling operator is ready to start now there is a lengthy judicial process that takes place first. Leasing is often times just speculation and may not lead to drilling anytime soon, other times it may be closer to reality. Take the promises of Landmen with a grain of salt!