Tie Land & Navidad proposal Carter County


#1

I have been contacted by TIE Land on behalf of Navidad Operating Co. to lease a few acres in the tracks below. How in the world would I determine if their offer is within reason ? The Royalty seems fair but I’m not sure about the Bonus money. Being very much a rookie, any assistance would be appreciated greatly.
Paid-up three year primary terms
Bonus $200 per
1/5 Royalty
3 year option to extend

Tract 1:
West Half of the Southwest Quarter of the Southeast Quarter (W2 SW4 SE4) of Section 4, Township 5 South, Range 1 West, I.M., Carter County, Oklahoma.
Tract 2:
South-half of the North-half of the Northwest Quarter (S/2 N/2 NW/4) of Section 9, Township 5 South, Range 1 West, I. M., Carter County, Oklahoma.
Tract 3:
Northwest Quarter of the Northwest Quarter of the Northeast Quarter (NW/4 NW/4 NE/4) of Section 9, Township 5 South, Range 1 West, I. M., Carter County, Oklahoma.
Tract 4:
Northeast Quarter of the Northwest Quarter of the Northwest Quarter and the North-Half of the Northeast Quarter of the Northwest Quarter (NE/4 NW/4 NW/4 & N/2 NE/4 NW/4) of Section 9, Township 5 South, Range 1 West, I. M., Carter County, Oklahoma.
Tract 5:
Northwest Quarter of the Northwest Quarter of the Northwest Quarter (NW/4 NW/4 NW/4) of Section 9, Township 5 South, Range 1 West, I. M., Carter County, Oklahoma.


#2

Just a couple of friendly pointers so you don’t get railroaded on this lease.

  1. That royalty isn’t bad, but the only reason they’re offering 1/5 in a county where 3/16ths is the most commonly paid royalty is because they are killing you on the bonus.

  2. That bonus should be at $1000 – the high in Carter county is $1058 with the most common being $1000 per acre.

  3. Nobody in their right mind would grant a 2 year option in a county this hot, and to ask for a 3 year option is just ridiculous. If you can’t drill a well in the primary term of 3 years, then you should have to negotiate a new lease after expiration.

Good luck in your negotiations!


#3

I’m pretty sure it would depend on the activity in that particular area. Parts of Carter might be hot but others not so much, like mine.


#4

Thank you for the reply - I may be wrong here, but it appears that most of the HOT areas in Carter county are in the northern part of the county. These parcels are in the southern portion. I tried to squeeze the Landman for a few more $ but I was not successful. It was going to Pool very soon and I didn’t want to mess with that so I signed the dotted line. I only have 3.17 acres in these tracks and hoping they pump for a long time. Best Regards


#5

True. I didn’t take the time to look at a map, just wanted to give some friendly advice. And @John_Ross1 is correct, depends on the spot. Echo will pay a fortune if you’re in one of their plays.

Best of luck to you @Snafu, hope you hit a big one. And I hope you struck that 3 year kicker from your lease.


#6

I had a similar offer several years ago for mine (5s2e 17). They wouldn’t budge on the % or bonus. I didn’t think about shorter terms. I will next time. On hindsight i should have taken it of course. If they don’t have any competition for an area they’re pretty stingy.