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Oil/Gas/Lease offer in Love County, OK

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Question
Mr. Scott,

I've been offered 3/16 royalty plus $500 per acre bonus for a 5 year oil and gas lease in the following sections in Love County, OK:

Section 13, Township 8 South, Range 2 East
Section  7, Township 8 South, Range 3 East
Section 18, Township 8 South, Range 3 East
Section 19, Township 8 South, Range 3 East

Does this seem reasonable to you?  I inherited these mineral rights, don't live in the area, and know little about oil leasing.  I'd appreciate your advice.

Thanks!

Answer
Price isn't bad, but I wouldn't go for the 5-year term. I'd tell them same price but for 3 years. You've got multiple sections they want so I think that's probably doable as there is more than one company leasing in this area currently. Red River Royalty, V.M. Harper, and Cullins Resources for instance.

If they won't budge on the 5 years I'd still consider taking their offer though, as it's really not a bad offer. I just prefer not to tie up my mineral rights for more than 3 years.

Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
The Mineral Hub
www.mineralhub.com  

Oil/Gas

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Frederick M. Scott

Expertise

Oil and gas leasing, lease negotiations, how to best deal with the oil and gas companies or their representatives, buying/selling mineral rights, forced-pooling, correlative rights, deeds and conveyances, and "post-production" costs. I am most experienced with Oklahoma properties and laws, but am able to answer questions concerning other oil and gas producing states in many cases.

Experience

I am a Certified Professional Mineral Manager (CMM) certified by the National Association of Royalty Owners (NARO) in Tulsa, OK. I am also a Registered Professional Landman (RPL) with the American Association of Professional Landmen (AAPL). I have managed my family's oil and gas properties in Oklahoma for over 10 years and have dealt with many landmen, title analysts, attorneys and other oil and gas professionals in the process. I have written several articles which have appeared in various oil and gas industry magazines and newsletters. I have negotiated and drafted leases, prepared deeds, affidavits, and other legal instruments relating to my own minerals, as well as performed title, legal research, and curative work for same. I have acquired a good deal of knowledge on the subjects of oil and gas law, mineral appraisal, and landwork over the past ten years, and also worked as a professional landman and lease buyer for a time. I've seen the business from "both sides" and therefore feel confident I can help out most of the folks who ask questions in this forum.

Organizations
National Association of Royalty Owners (NARO); American Association of Professional Landmen (AAPL)

Publications
National Association of Royalty Owners "Action Report" (ROAR); NADOA Magazine, The Mineral Hub, Landman Magazine, and several royalty owner association group's newsletters.

Education/Credentials
Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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