Lease Offer but very disappointing
Hi Guys, Thank you for your comments. Just an updat. My location on Jefferson Paige Rd between Pines Rd and I-220; Section 7, Township 17, Range 14 which was the HA-RA SU83 + 640 acres proposed for drilling by Mammoth Mineral June 2021. As I mentioned I received 2 letters for selling my mineral rights without much interest from the parties or mine; I have just under one acre. BUT I did receive a call from for leasing however it seems very low but I have nothing to gauge it by. These are the offers: $500 upfront with 1/5 royalties; $750 with 3/16 royalties or $1000 with 1/8 royalties with 3 year lease and 2 year option. I haven't even called the lease land company back and it's been 3 weeks. The company is Core Resources out of Oklahoma. I just don't know what to think; I have no comparisons....just nothing to go on to make a decision.
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Replies to This Discussion
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Permalink Reply by Mary Hall on
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Is there anyone that has any input about these numbers for a lease agreement? And then I think how does a landowner ever know what is fair, right and real with the royalties? How and where do you find information to be your own advocate? Or do you need an oil gas attorney? Which I don't see that being money spent well either.
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Permalink Reply by Skip Peel - Mineral Consultant on -
Mary, with less than acre, your choice is to take the best offer on the table, $500 and a 20% royalty, or get forced pooled. This is the current realty. It has no correlation to lease offers in the past. I wish I could give you some alternatives but the truth is you have zero negotiating leverage. Don't spend any money on O&G attorneys. It isn't worth it for less than an acre. Take the offer and hope for good wells. At less than an acre it will be modest income which is still better than none at all.
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Permalink Reply by Mary Hall on
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Thank you so much Skip, that's what I thought also. But surely was hoping for better.
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Permalink Reply by Skip Peel - Mineral Consultant on
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You're welcome, Mary. Good luck.
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