we've been approached by square mile energy to enter into a leasing option for minerals in the area we own in colorado county texas....we're seeking feedback from mineral/oil owners or others who have dealt with and/or know of them....good reputation? how are they to work with and lease to?
thanks!
kristen piper
where is you place in colorado county texas, are you north or south of I-10, we are off I-10 near weimar texas, are you close to weimar, did they contact you thru the mail or phone, we have been wondering if they are thinking of drilling in an around weimar texas, this was my moms place and we go there when we can
Karen,
Make certain that you know and understand what a "leasing option" is. To me that is a big red flag.
Gary L. Hutchinson said:
Karen,
Make certain that you know and understand what a "leasing option" is. To me that is a big red flag.
Gary L Hutchinson
Minerals Management
Gary:
can you be more specific re: understanding the "leasing option"?
thanks.
Kristen
A "leasing option",(your words) could be an attempt to tie up your minerals in anticipation of the optionee getting a chance to trade your lease to another party without taking an actual lease from you. You lose all bargaining power to get a fair amount should you decide to lease your minerals.
Gary L. Hutchinson said:Karen,
Make certain that you know and understand what a "leasing option" is. To me that is a big red flag.
Gary:
can you be more specific re: understanding the "leasing option"?
thanks.
Kristen
Kristen, your agreement to lease has value in and of itself, if you grant an option without receiving payment, you have given something for nothing. I would say to tell them to come back when they have an actual lease offer, in which case you should seek professional leasing help or do a great deal of study and have an attorney approve your negotiated lease. In all cases, make sure you get paid before the executed lease leaves your hands.
Gary L. Hutchinson said:
A "leasing option",(your words) could be an attempt to tie up your minerals in anticipation of the optionee getting a chance to trade your lease to another party without taking an actual lease from you. You lose all bargaining power to get a fair amount should you decide to lease your minerals.
Gary Hutchinson
Kristen A. Piper said:
Gary L. Hutchinson said:Karen,
Make certain that you know and understand what a "leasing option" is. To me that is a big red flag.
Gary L Hutchinson
Minerals Management
Gary:
can you be more specific re: understanding the "leasing option"?
thanks.
Kristen
my apologies for the confusion....we have great legal counsel...we wanted to see if anyone had worked with fenner land services on behalf of square mile energy.... we've seen an increase in proposals in the past 6 months to lease our colorado county texas land and may consider moving forward.
kristen
If they are seeking an option and not an outright lease, I would say that answers the question right there. In my opinion you don't want to deal with someone who wants something for nothing. If they even have the money required to develop your minerals and are that cheap, they may not pay you royalty or underpay and force you to spend tens of thousands of dollars to sue them to get your due. If they do not have the money to develop your minerals you could be in an equally bad situation. I'd wait for the lease offer and forget options unless they specify the amount of consideration for the contingent lease and lease terms, the option is of short duration and most importantly, require payment and the payment is a condition of the option being in effect. Probably also throw in a clause that the entity wanting the option will pay your legal fees if litigation arises as the result of the option. I think a paid option could be a good deal but I think generally unpaid options aren't.
what survey in
We, too, have been contacted by Fennerland on behalf of Square Mile. What is on offer is a 3 year lease, 3/16th royalty, $125 per net mineral acre as up-front bonus. Have no idea where this property is - legal is in South J.B. Fenn Survey. Anyone have any insights?