I have received an offer for an O&G lease from RWT Land Services for a small tract of acreage (116.47) which will be split between 7 siblings. Although this is a small parcel, I would like to ensure that I am not totally getting shafted, as I am treading on unfamiliar territory. They are offering $250/net acre, 3/16 royalty and a 3 yr. primary term w/2 yr. option at $200/net mineral acre. This land is in the Sand Trap Area 2A-3 prospect, B.C. Lewis Survey. Is there any way to find out what is being offered for acreage surrounding my acreage, or if I am being offered a fair price? Are there records at the courthouse that could help me, and if so, what type of information would I need in order to look this up? Any assistance would be greatly appreciated!!!!
Have you joined the Cherokee County group (top of page under groups)? People in that area would be able to tell you more about what is comparable in that county/area.
Dear Sherial,
They always start their offers low. Take the time to read the attachment. Everything is negotiable. Don't give away the farm.
Also remember that once this lease is signed, they are entitled to take all the groundwater they want (from ground tanks to drilling a new water well) UNLESS you enter a provision that they are not to take any water nor drill any new well (including not drinking from outside faucets).
I believe each of you can sign your own O&G lease. But, it would be better if all agreed to its terms.
Also, watch out for the "snake oil" landman who will tell you what you want to hear. Once you sign the lease, it's waaay too late.
Get everything in writing ... no verbal promises. Also, don't let him try to "slide" a pipeline ROW agreement into the lease. Tell him that this should be a separate document (also to be negotiated.)
Good luck,
Pat
1064-SigninganOGlease_hints.pdf (74.2 KB)Sherial - I can't say if your offer is fair or not but my advice is to never accept less bonus for a 2 yr. option than the bonus amount you receive for the primary term. Why would you want to short yourself? Also, try to stay away from extensions if possible. All you're doing is tying up your minerals for a possible 5 year stretch instead of 3. I wish you luck.
Yes, I have joined that group (I think), but I'm having a little difficulty moving around in the forum. I thought I was posting in that area, but I guess not. I have only been a member for a week or so but I will try to migrate over there shortly. Thank you for your response.
Thanks for the advice. And I am most anxious to read your attachment! I appreciate it!
Thanks for the advice. Since I have zero experience with this, I appreciate it!
Sherial, this is a wonderful place to learn a lot. If you hang out here and read as much as you have time for you will learn tons. Use the top of the page and visit the forums and blogs and use the search at top far right, you won’t be disappointed.