My lease will expire in Aug 2017. Been offered a top lease to sign early (20/80) with a new operator that purchased ours (sec 22 12 N 66 W) and other leases in the area. No current active wells on our property but many directional permits next to us. Any advice on fair bonus offers would be appreciated.
Many professionals have commented about top leasing on Mineral Rights Forum. I strongly advise you to read some of the comments.
It is my opinion the the WORST thing a mineral owner can do if he wants to protect his mineral potential is to sign a top lease. Especially in an developing area like Weld County. The risks of granting a top lease far, far outweigh what pittance may be realized.
Hi Mr. Jones,
I've also received now 2 offers for a top-lease on my acreage nearby in 12N-65W. I've decided to sign with the more competitive offer of the two. I don't always like to lock myself into top leases but I'm deciding to in this case for 2 reasons, the more competitive offer is with an Operator that is active in the area and my lease is expiring in June (so sooner than yours is, but given the sluggish recovery of oil prices, I've been entertaining top leases up to 6 months in advance of lease expiration).
The better of the 2 offers was for a 5-year term plus a 2-year option for $150 p/acre. They wanted a 12.5% royalty, but I negotiated to get a 1/6 (or 16.666%).
Good luck to you and hope this helps!
Thanks for sharing some of the details of your lease. 12N 65W looks very active. I signed my lease 8 years ago and regretted it from the start once I saw comparable offers in the area. I hope you made the right decisions and wish you the best. Can you share who you signed with?
Hi Mr. Hutchinson,
Thanks for your thoughts on top leasing as I'm not familiar with it. Do you have any thoughts on fair bonus offers? We own 320 acres. Been offered $300/acre and 18 % royalty.