Received the Lease Offer for 36-9N-7W. Have Questions About Negotiating

As I was expecting, the offer is for $2500 bonus per acre; 3 year term; 3/16 royalty and post production costs among several other clauses. The offer is from Lowry Land Co. Inc. Current lease expires late September of this year. I have slightly over 2 NMA in this section.

I don’t think this is a fair offer from reports I’ve been hearing so I want to negotiate something better. All the previous Oil and Gas leases I had signed, I had blindly accepted the terms of the initial offer. I don’t want to do that this time. So, this leads to some questions that I have.

Do I just send back the unsigned lease to Lowry Land with a note stating what terms I consider to be an acceptable offer?

If I don’t accept this initial offer, would I more than likely be forced into a contract in the end?

How acceptable to negotiating are these land companies? (Probably hard to answer, but I had to ask)

Bonus payment (per contract) states that it will be paid in 2 installments after I have sent in the signed lease. Shouldn’t I request that when an acceptable lease is sent to me, it would be accompanied by a Sight Draft or maybe another form of immediate payment of the entire bonus?

I will more than likely have more questions. I also can try to post a copy of the lease if I can figure out how to do that and if it is acceptable to do so here on the forum. Thanks in advance for any information you can give me.


Your bargaining position for 2+ NMAS is rather weak. It might be best to call the Landmark from the. Splitting lease bonus over 2 payments is worrisome. Demand all at once, but tread softly or you could be force pooled.

If you think someone else is getting more than you? You might have the opportunity to get the same in the pooling. One of the best negotiating tactics is to put them on ignore. It's a landman's job to secure leases, not yours.

Three operators have filed applications to pool this section. Is your acreage already leased?

Yes, it is currently leased. The current lease will expire September 28th of this year.

Hearings are resuming Monday. I think that someone will get a pooling order and a well will be drilled but the current lease may expire before the operator can get started (thereby holding your lease). You could contact TPR Mid-Continent, Keystone Energy Partners, Kalos Resources, EK Exploration, Gaedeke Oil & Gas, Echo Energy or someone else. Lowry is representing Continental Resources but other companies are interested in leases in this section. Having less than five acres is not a plus.

This has been a learning experience for me and I am glad for that, so I thank you all for the information and advice you have given me.

Glen, I recently leased about 4 miles northwest of you for $5000 an acre and 22% royalty and good Exhibit A. I also had small acres but not as small as you. I know of many others in 9N, 7W that have recently leased for $3500-$5000 and almost all at 1/5. I think your minerals are worth more than you were offered. Landmen read these posts everyday so hopefully you will get other and better offers.

Thanks for that information, Lawrence. That gives me some numbers to shoot for. I've just been ignoring Lowry's offer and am looking to find something better than that.

Glen, friend me so you can private message and can give you more insight into leasing in 9N-7W.

Thanks Lawrence. This is new territory for me; I could use more information. Request has been sent.

If you can lease again (if no well is spud before you expire), make sure you get no post production charges whatsoever, no enhanced, no nothing!

Limit your shut in time, get a depth clause, no top lease, no warranty of title, etc.

Thanks, M Barnes. The depth clause I will have to research further to understand the finer details of it. The other ones, I understand what you mean and I will negotiate for. The reason I am so concerned over 2 nma in this lease is that, if held by production, whatever I sign will be the way it is for a very long time. Probably for longer than I will be around. And I really don't want to leave a bad deal for whoever gets these mineral rights after me. Thanks again.

Search the internet and find the current copy of the Oklahoma Royalty Owners Handbook in pdf provided free from the OCC. Many questions from novices are answered in this publication and it is geared towards the mineral owner.

Thank you for opening this discussion. Mine is 36, 7N, 8W; so I'm interested in the answers you are getting.