Offer for Oil and Gas Lease

My siblings and I just recently inherited mineral rights in Campbell County, Township 44 North, Range 76 West. Hoover and Stacy just made an unsolicited offer for $800 per net acre (14.9 net acres) bonus and .1875 (3/16ths) royalties for a 5 year lease “and as long thereafter as oil or gas of whatsoever nature”. Does anyone have any feedback on this? Are Hoover & Stacy a reputable company? Thanks for any help.

Unfortunately, I can’t speak to Hoover & Stacy’s reputation, however, I can share our MR leasing journey over the past 8 years. Go slow, seek wise counsel, and ask a lot of questions.

We leased our MRs in Campbell County (322 gross acres) back in 2013 to Mallard Creek Oil (Ft. Worth, TX).

Bonus Consideration Payout: $700 per net acre Primary Term: 5 yrs Royalty interest: 18.75%

Summary: The land was never drilled after 5 yrs and Mallard Creek was not interested in renewing the lease.
The bonus payout was a huge blessing as it literally “saved” my great aunt and great uncle’s house from being sold in order to pay for their healthcare. They were able to stay in their home until they passed away.

June 2021 Update: Rebellion Energy has been sending us certified mailings for the past couple of years with the intent of applying for drilling applications. My guess is they’re trying to “lock up” several areas in the Campbell County area so they are able to maneuver MR owners into “forced pooling”.

In terms of your situation, I would seek out an attorney (which we did) in the local WY area which has experience negotiating MR lease contracts. We have had working experience with:

Davis & Cannon Law Firm (Sheridan ofc) Clint Langer

(2019) We hired them to reach out to their contacts to see if anyone was interested in leasing our MRs. No luck.

The Salisbury Firm, P.C. (Cheyenne, WY) James Salisbury

They reviewed the original MR contract we had with Mallard Creek Oil before we signed.

Best, -andre

Thanks so much for this info Andre’. It’s very helpful. We made a phone call to another company, and they immediately came up to $1000/acre and 20%, with a 5 year lease and a 5 year option. We will continue to explore our options.

Well done! Would you mind sharing the company that offered $1k p/ac? We’re trying to find interested co’s to lease our Campbell County mineral rights. Best, -A

Sorry that it took so long to get back to you. You can check with David Hansen (936.520.4468). He is with Surprise Valley Resources. One thing that I’ve learned, is that a 5 year lease with a 5 year option is not as good a deal as just a 5 year primary. You may already know this, but a 5/5 means that they have 5 years to start drilling with an optional 5 years to start. A 5 year primary with no option just means that they have 5 years to start, with no option to extend. In either case, if oil/gas is found, the contract is in force until as long as the well produces oil

Thanks so much for your contact and response. I knew about the primary contract vs option to renew. Having previously researched the MR forum, many people would advise negotiating for 3yrs. Best to you and your family…