Our family (bother and sisters) have been approached about amending or a new lease and intent to drill a horizontal in Wheeler County, Tx. What type of lease agreements are typical in the area? I have seen some talk of 1/4 and $1000/acre. Is that close or at least a good place to start? There are some producing gas wells (V) on the property now.
Jim,
Pogo's (Occidental?) reasons for amending or granting a new lease could become far more important to you than any bonus revenue you might receive. Do a close evaluation of where you will be after production is found on a new lease. You may be in line to benefit from a strong "Pugh" clause in your current lease: a concept that gets a lot of discussion but rarely results in a practical application during production. If that is the case, thank your lawyer. Also, make certain that the lessee is well financed and can do what they say they can do. You can make that a provision of a modified lease if you like.