I have just received a contract for 1/4 interest of 51 acres in Polk county with a $250.00 per acre bonus. It is a 3 year primary term contract. Is this a fair offer for Polk County?
Dear Ms. Daniels,
There is much more to an offer than just the bonus. Other items are lease term, whether they can option the property at a later date, royalty rate and the lease form itself.
From what I can tell from the contract, the lease term is 3 year primary, 1/5th Lessor's reserved royalty, $250 per acre bonus.
There is a paragraph that states that Unless sooner terminatedor longer kept in force under the provisions hereof, this lease shall remain in forcefor a term of three (3) yearsfrom the date hereof, hereinaftercalled "primary term"and as lonf thereafter as operations,as hereinafter defined, are conducted upon said land with no cessation for more than ninety (90) consecutive days.
It also says they will pay 1/5 of oil or gas the market price on the day it reaches their storage tanks or pipe line.
Does this help?
As Mr. Cotten indicated there are many things that make a lease favorable to you and fair to the operator at the same time. It's a very complex thing and in my opinion should be done by a professional. They don't cost that much and pay for themselves many times over, getting you the most money for your minerals.
I have another question. In doing a lot of digging, I found out that this same property was leased three years ago to one of my aunts. She was offered an extended lease this time (she is 25% of these mineral rights) and the other 75% were not contacted until this time around. Is this typical?