I’ve been given three options for a small (0.63 nma) lease.
3 year lease term, with a 2 year option, or a straight 3 year lease.
Option 1- $752/acre bonus with 1/8 royalty (12.5%)
Option 2- $502/acre bonus with 3/16 royalty (18.75%)
Option 3- $402/acre bonus with 1/5 royalty (20.00%)
I’m considering a counteroffer of $800/NMA and 20% royalty. Is this reasonable?
Thanks!
Nope! You could ask, but not likely. If you have not leased with Continental before, suggest that you either get a good attorney to look over their draft lease as it is not usually friendly to mineral owners or wait for pooling (cheaper alternative for less than an acre). The pooling will give the maximum that Continental has offered for that section in the past year. Likely to be pretty close to what you are getting offered right now.