Offer to lease letter

Oil and Gas Leasing Help
1

Saskatchewan, Canada

Estavan county

StandardLand leasing company, Calgary ,Alberta Canada

N/2 31-3-6 W2M

33.34 net acres owned

Greetings. I received a letter offering a lease on some mineral rights I own in Saskatchewan Canada. I will post the letter below. I am new to the oil and gas leasing, and am not sure about the intent and purpose of this letter; it does not look like a lease to me. I am planning on waiting a few days and calling the landman that sent the letter, letting them know I am interested in doing business with them. Any help or suggestions?

page 1. of letter

October 10, 2013

Re: Offer to Lease all mines and minerals
Mineral Owner: Paul Fischer
Land Description: N/2 31-3-6 W2M (Undivided 5/48 interest)
No. of Acres: 33.34 Net Acres
Our File: 335290198 & 218

I write to introduce myself and our company and to provide you with an offer for your
consideration. We understand that your mineral rights are not under lease and as such, we are interested in presenting you an offer to lease your mineral rights. Standard Land Company Inc., on behalf of our client, offers to lease all mines and minerals within upon or under the said lands under the following terms:

Bonus Consideration: $5,000.00 CDN ($150.00 per acre)
Lessor Royalty: 17% (clear of deductions)
Term: 3 years
Lease Form: CAPL 91*

*Please note the offset well clause will only apply to wells drilled subsequent to the date of
the lease
If this offer is acceptable to you, please sign one (1) copy of this letter and return both
pages to our office, either by mail or facsimile (403 265-1118) or scan and email.

page 2. of letter

Upon receipt, we will prepare the necessary documentation to give effect to this letter agreement upon final approval of our client.

This offer is open for acceptance until 5:00pm MST, October 25, 2013

Please contact the undersigned with any questions regarding any of the above toll free 1-866-858-1116. Thank you.

Yours truly,
STANDARD LAND COMPANY INC.
Brett Lawrence
For Craig Stuart
Landman

The terms of this offer are accepted to and agreed upon this __ day of ______ _
2013.

PAUL FISCHER
Telephone number:

2

Paul:

While I am not familiar at all with the rules and regulations governing leasing oil and gas minerals in Canada, this looks like to me that the land company has taken a first step in securing a lease of your minerals. The way it sounds, if you approve of the proposed terms, they will execute a formal lease for your final approval. If it were me, I would conduct all correspondence via email and not sign anything until the original lease is in my possession. Again, I don't know the rules in Canada and signing anything could be on the dangerous side.

3

Thanks for the reply Charles.

4

Paul. We received an offer from the same company for the same general area. We are doing due diligence on the offer and were wondering how yours is going.

This is the first offer we have had and are unsure whether to go ahead or not. Any thoughts?

Janice

5

Janice,

I did not sign the offer from Standard Land, but replied to it with a reasonable counter offer. My brother, who has a mineral interest equal to mine, replied with the same offer. It has almost been one month since we sent our letters, and have not heard a reply; no reply through email or mail. How close is your mineral interest to mine?

Paul

6

Paul

Ours is Se 17-3-9 W2M. There are four groups each owning a block of several acres.

We believe the offer is to low too. Guess we’ll counter and wait to see what happens. Thanks for the info.

Janice

7

I know in the daily sinclaire field in Manitoba an offer of 300 per acre had worked a year ago. FYI. Try the Canada FHOA sight for good information. Lori

8

Are you being force pooled? Did they ask if you wanted to participate?

9

Lori,

I am not being force pooled yet. We just started negotiating with the land company. From what I found in Saskatchewan law, if force pooled, my portion of the costs of drilling and completing a well are not to exceed 200 %. I could not find anything on royalties in Saskatchewan or Canadian federal laws.

10

Paul,

We have negotiated a higher lease offer with the land company for what we felt was reasonable for leases in the area we are in. We have had our lawyer draw up amendments to the lease to protect us from any expenses for drilling, etc. and changes to a number of other clauses to protect us . The amendments to the current CAPL 91 lease are now in the land company’s hands. We felt it was better to deal and negotiate protections than push for much more in the way of bonuses and royalty percentages than to possibly be forced into something we don’t want. If you’re not sure about things talk to a Saskatchewan Oil & Gas lawyer. It might cost you but it will be well worth te expense.

Janice