Questions about offer

We received an offer to lease our mineral rights in Sec25 T2N R3W of $500 an acre for 3 years with a 2 year option after those 3 years, this same parcel was leased in 1985 for just under $1500 an acre. Does this sound like a reasonable offer now or should we hold for more? I see where there is activity in the area just not here,is there activity in this area now? I know the price of oil is down right now, but after checking the price in 1985 it appears that it was even lower then, in 1986 it fell from $27 to below $10 ($58 to $22 today). So it appears the price equivilent of todays prices was around $60.00 a barrel so it seems abouit the same as now. We inhereted this mineral rights and were not involved with the deal in 1985, so we really don't know how to proceed. We don't want to be greedy, but don't want to get shafted either. Just seeking information to be able to get a fair deal this go round.

Thanks in advance for any help,

James G.

Hi James, I would like to talk with you on this. John McClain

Last pooling for that area was in September by Newfield... (Section 23) $1400 @ 1/8, $1200 @ 3/16, $1,000 @ 1/5 or no cash and 1/4. Some will argue that the recent drop in oil prices drops the amount that can be paid for a lease. That's where you have to decide what you will take.

James G., I just leased in 32, 33 & 34 with Jackfork for Continental for $3000 and 1/5 per acre. Never take the 2 yr option. $1500 per acre sounds a little low to me. In 1985 our leases in this area only paid about $150 per acre.

James, I only leased in 32 & 34. 33 is HBP. My mistake. I also just now noticed you stated the current offer is for $500 per acre. No way I could tell you that I think this is a fair offer. Just my thoughts based on very recent experience in the last month, well after the bottom fell out..

Thanks to all that have responded, it is appreciated very much.