We were looking to see if anyone has an idea of the best lease rates being offered in Township 2, Section 13S, Range 38E, Lea County for 1/4 RI and 1/5 RI.
We are being offered 1/5 RI and $300/NMA lease bonus.
Thoughts?
Seems light given the climate right now. The S/2 of the County is where there have been very high offers $80K+/acre while the N/2 looks to be ranging from low hundreds up to around $4,500. I would counter with a higher but viable bonus along with a 1/4 royalty, 3-year no extension term and any standard Pugh clauses you want (e.g., no deductions for marketing/servicing) and let them come back to you with a response.
The worst they can say is no but I assume you’ll end up with better terms than currently being offered, particularly if it is from an operator with other holdings in the area.
Good luck!
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