Offer for lease received S34-7N-10W

I am one of a group of heirs to some mineral rights at the above property, we received a letter from Hal Smith and Associates in Norman regarding a lease agreement. It is only a letter offering the following terms:

$250.00 per net mineral acre with a 3 year primary term, and a 2 year option at $250.00 per acre.

a 3/16 royalty as a share of production.

I don't remember how many acres are involved and the one cousin whose contact information I had readily available didn't remember either. The last time someone leased the property, there was a much more formal lease. I am assuming this is just preliminary inquiry to see if we are interested and the formal lease would be sent later.

My questions are these: Is there new drilling starting up in the area and is this a reasonable offer? I plan to read up on the depth clause and the no deductions clause before signing a formal lease. Is there anything else I should double check?

Thank you.

Janice Di Marco

You are correct, it is an offer the real lease will come later in the process. I personally would not give them the 2 year option but that may be a deal breaker for them. I would try the straight 3 year. Or if you are willing to take a 3yr-2yr option, try for a 5 year. I don't want to give them the option to tie it up for 5 years and not continue the lease past the 3 year point if they change their mind. That is what a 3-2 does.

That is about the price of the offers I have been hearing in that area but the recent poolings have been in the 500-600 range for 3/16.