Received an offer from United Land Company on behalf of Silver Creek Oil & Gas. Offer is for 3/16ths royalty and $125 per acre for a three year lease with an additional two years at the end of the primary term for a bonus.
Two years ago, they (United Land on behalf of Silver Creek) sent a offer on the same land for a 3/16ths royalty and $250 per mineral acre. At that time, I rejected the offer and countered…which they ignored.
Has anyone else received an offer to lease in 22-7N-8E. It doesn’t strike me as a very attractive offer, but perhaps that’s the going rate for that area.
I would not do the two year extension. I would ask when they plan to drill and consider stalling a bit. Silver Creek leased Sec 31 for $250 3/16ths and $200 1/5th in early 2019. It is not in the contiguous nine sections, but does indicate a somewhat higher amount in the township,
You do not want any post production charges, so will have to negotiate a better set of lease clauses than what they put in front of you.
Thanks so much for the feedback! I like your idea of asking them when they plan to drill. I’ll see what they say, and then consider doing a counteroffer asking for a better “deal” and doing away with the post production charges.