Now Offers to Lease Not Purchase 32-2S-4W

Previously we negotiated 2 or 3 Leases for this site. Then for a year or two we only recived Offers to Purchase no Lease Offer.

But a few months ago we received Lease Offers from TWO companies as follows (though nothing since late June)

ACE Energy: Bonus $1,500 per acre at 3/16th Royalty–3 Year Primary Term; or (from ACE) Bonus $1,300 per acre at 1/5th Royalty–3 Year Primary Term

Blue Chip Energy Partners: Bonus Consideration $850 per acre at a 1/8th Royalty–3 Years; or Bonus Consideration $450 per acre at a 3/16th Royalty–3 Years; or Bonus Consideration $300 per acre at a 1/5th Royalty–3 Years

Additional contect: my girlfriend is conflicted about Selling OR Leasing OR Doing Nothing because of her philosophical objection to Fracking (if Fracking is even a consideration with this site).

Any feedback in any manner greatly appreciated as always. This Board has helped us considerably in our 2 previous Leasing proposals.

Why all of a sudden 2 Leasing proposals now after Purchase Only proposals for several years? Are more Leasing and/or Selling Proposals expected? Do companies pull these Offers if an immediare response is not made (as stated it has been a few months)?

Thanks in advance.

Michael and Diana

Not sure about the sporadic nature of speculating, it seems to go in waves.

As far as being opposed to Leasing, it won’t matter much if the operator does a forced pool. You will be leased whether you want it or not. The minerals will be removed and you’ll get whatever the court decides to give. I am not sure there is any way to stop the consumption of fossil fuels, other than buying alternative energy items (cars, solar power for the home).

Might as well lease and take the bonus until the word changes significantly imho.


Neither of those companies are operators. They are either working for another company that will operate or wants a piece of the working interest or they will flip the leases for a higher price. I always ask what they are offering for 1/4, just to see if they have room to work. I do not take 1/8th and rarely take 3/16ths. The higher the royalty, the higher the payout (in many cases).

With regards so “fracking”, almost every well for the last 100 years has been hydraulically fractured in some way. If you drive, have AC or heat, wear clothes, use makeup or pharmaceuticals, you have been the beneficiary of hydraulic fracturing. Most energy sources in the US are eventually rooted in hydrocarbons. When solar and wind can hold their own place economically and better batteries are invented, then we will see great strides forward in that arena. I certainly want more renewables even though I am in the oil and gas business.

If she would like a more balanced view of what hydraulic fracturing actually is, I would be glad to explain it. I think she would feel more comfortable about it if she knew the facts instead of media hype.

You may be leased or force pooled, no matter what decision you make. There is quite a bit of horizontal drilling planned around you-hence the interest in buying or leasing. As there are no active OCC cases right now for 32 (there are for 34 and 35), you can probably stall a bit and see what those pooling reveal as to pricing. Then you will know if yours are competitive. Watch the case 201900288 to get a feel.

If you do decide to lease, come back and get advice on the terms of the lease. The standard leases offered by those companies are not usually in the mineral owners favor and will need some negotiation and a good Exhibit A to overrule some of the clauses.


I always say take as much money as you can and try to do something good with it. You can’t stop the machine that is our consumption. People can blame the oil companies all day long until they are blue in the face but at the end of the day, we as consumers drive the demand. It’s just business.

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As always thank you so much for this guidance. I hope to continue my Due Diligence/Fact Gathering including further responses from this marvelous site.

The feedback so far regarding fracking is also appreciated. I’m not sure how strong her concerns about Fracking are–she raised them with me for the first X last week–but I will urge her to resist any inclination to Sell these interests at any price because of fracking concerns.

I’m far more interested in negotiating a favorable Lease and getting her a competitive bonus and royalty while retaining Ownership as we have done (with the help of you folks) 2 or 3 times in the past.

Ongoing thanks to all.

Michael and Diana

Michael and Diana, If I may comment; I understand the concerns about fracing, I have family members that are of the same mind. In 2012 my brother sold his minerals for $1200/acre, the wells were drilled and fraced and are still producing. I guess he feels he won a moral victory. I retained my interests and was recently offered $26,500/nma.


Fracking got a bad name early. If Edison invented the electric chair instead of the light bulb we would probably have the same reaction to electricity. From my observations, companies and regulators are figuring out how to frack responsibly. Selling doesn’t stop the process. That Gene cannot be put back into the bottle.

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The girlfriend expressed this for the first time ever very recently and I’m not sure how deeply felt her concerns are. I am urging her to retain the asset here try to get a good deal and wait and see for the distant future. As always this feedback both on the Terms offered and regarding Fracking are deeply appreciated. I will keep everybody in the Loop after I make my first calls to ACE Energy and Blue Chip next week.

Tho it seems their offers are lowball in several respects I still have little idea what a “non-insulting” offer to Lease would look like.

Ask them both for a copy of their draft lease. Do not agree to anything. I have seen draft leases from both of them and they are going to need a lot of negotiation to get more into the mineral owner favor. They are most likely leasing for someone else or to flip, so this could take a lot of conversation. The pooling case I mentioned above is going to give you a feel for the “fair” value for the area.

Ask each of them who they are leasing for, when that operator plans to drill, what horizon they plan to drill, when is pooling and any other question you want to know. Ask them how long it will take to do the title search. (You are not going to hand over a signed lease without a check). Look up both of their names on the forum and get a feel for their reputations.

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I agree with M_Barnes. You are in no rush here. Slow play it and make sure you get exactly what you want both on money and on lease terms.

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Ms. Barnes: thank you for this very helpful response. You have always helped me and others and this assistance is greatly appreciated. I plan to call the 2 companies and begin the process later this week.