We have several companies interested in leasing our 40 acres in section 27 10n 9w. They are offering 200% of lease bonus after initial lease term. This option is new to me, any recommendations?
This sounds like an extension option where the lessee can pay you 200% of the initial bonus to extend the lease another term of years? If so, it seems they are admitting the value of the leasehold will double after the initial lease term. In reality, the value of your unleased mineral interest, after the initial lease term expires, could triple or more in value in the next three years. On the other hand, maybe they drill on your lease and its irrelevant. There is always the chance the value could stay the same or even drop.
My first advice is generally a hard no on any type of extension option. Hope this helps.
1 Like
Thank you for your feedback. Our last lease did not have an extension.