I have a 3 year lease with Samson Oil in Burke County. They originally promised to explore drilling right away. It is now about to expire with no activity. Anyone else having luck with Samson? Should we just lease with a new company if the lease expires? My lease has a 2 year option on it does that mean I am forced to renew with Samson should they want to?
Anyone else actively drilling in Burke County?
The option in your lease means that Samson can extend your lease for two years. I would check if there is any language in your lease such as Samson would have a specified period of time to extend your lease, something like, the right to pay bonus and extend the lease anytime within 1 year of the expiration of the primary term. I think if such language is not present and the anniversary of the third year of your lease passes and you have not received payment, that Samson has missed the boat.
If Samson does not hold your current lease by drilling or pick up the option, you may lease to whomever offers you the best deal. Shorter leases without options may lead to quicker drilling.
Don't ever believe anything they tell you that isn't part of the lease contract, if it isn't in writing, it didn't happen. Good luck in the next lease cycle if they don't pick up the option.
Scott:
Mr. Kennedy gives some good advice about the option factor. If Samson elects not to extend the lease, you should market your minerals to another operator but I would advise not to lease for longer than 3 years with no extension clause. You didn't specify where your minerals are located in Burke County (Township/Range/Section). Be sure to research your immediate area for active wells and their production figures. This will be a major factor in the negotiation process in the event that Samson does not extend the existing lease. Good luck.
The property is 163North, Range 90 West Not sure what is being drilled there now or by who? Or what the going lease rates are?
Scott:
What Section is your minerals located? Lots of previously drilled wells in T163N;R90W (Customs Field).
Scott Losee said:
The property is 163North, Range 90 West Not sure what is being drilled there now or by who? Or what the going lease rates are?
Section 6
Thank you
You have production near you in section 5 and 8 ranging from poor to what I would consider pretty profitable in the Midale/Nesson formations. Who knows what they can do with todays better technology?
Scott Losee said:
Section 6
Thank you