We (family) have mineral rights in 17-10N-9W, Caddo. For the first time since 2017, we hve rec’d an offer to lease. $800 bonus 1/5th royalty. We are not in the area so am curious what is going on? Wonder if we would be wise to hang tight for awhile to see what might come along. Last time we got $1500 1/5th.
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Just hang tight. Better offers will come, probably from the company you last had. Just hang in there.
Thanks for the reply. Hope your right!!
Lease bonus amounts this year are not as high as in previous years due to the level of competition. Thunderbird Natural Resources and Classic Resources have been filing leases in that township. The draft lease will not usually be in the mineral owner’s favor, so it is wise to get an attorney to look at the clauses and make improvements.
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Thank you for your response! The company we have been approached by is L3 Resources.
Classic Resources, Thunderbird Natural Resources, Rosebud Resources, JCS and others are leasing in the area. I see a range of royalty percentages from 1/8th to 1/4th. Personally, I prefer the highest royalty that I can get because the royalties can potentially last for decades. The bonus is only a one time thing, so usually far outweighed by a higher royalty on successful well(s). I think long term and more than one well.
Suggest that you get a good oil and attorney to review the lease as they are rarely in the mineral owners favor. If you are working with friends or family in the area, you can frequently share the attorney fees and each get your own good lease with the same wording. If you are working with the land agent on a multi-tract deal like that you can sometimes get better terms offered.
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Thank you. Always good advice!
Seems to be! After stating that $800 bonus was their top offer, they called agian after a day or two and have come up to the $1000 I suggested but at 3/16th as opposed to the 1/5 we asked for. Does there seem to be a “going rate” in the area currently? I am doing the footwork for a small group of family members and I’d like to do right by them. Any help would be appreciated!
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Our family is in a similar situation in a different part of Caddo County (13 8N 9W). We’ve had a few leases over the years with various companies, but no wells were ever drilled. Our current lease expires in Nov 2025 and we do have a new lease offer. Wells are going in nearby or have approved nearby, and we understand that a producing well(s) will mean that the lease will be in effect for the duration, not just the 3 year term. Like you, I’m doing the leg work for our family members, and I’m feeling the stress of negotiating the best possible lease terms for us since it seems far more likely this time that a well will be drilled. I’m trying to determine if there is a lease template (for Oklahoma) out there in the ether somewhere that favors the mineral owner rather than the oil company. So far, I haven’t found one.
There is no perfect lease template for Oklahoma. It is wise to get an experienced oil and gas attorney to help with the wording of a lease as they know the power of words and how the clauses of the lease work together based upon legislation and court law interpretation. Each negotiation is different depending upon the land rep and whether you are dealing with one working for the operator or an interested third party. If you cannot get an acceptable lease with no post production charges among about ten other important clauses, you can wait for pooling and go that route. It has its own advantages. Most of us want the highest royalty as that usually far outweighs a one time bonus.
Thank you for your reply. It looks like we need to pivot from searching for a good lease form to searching for an experienced oil and gas attorney.
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