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Oil/Gas/Lease Offer Pottawatomie County, OK


Dear Mr. Scott,

We have received a Lease offer for 30-6N-4E in Pottawatomie County, Oklahoma based on 3 years, 3/16ths, and $75 per acre bonus. Would $75 per acre be a reasonable bonus for this area?

I am a bit uncomfortable with the 15 day sight draft bank payment procedure. Are mineral Lessessís ever willing to just pay for the Lease upon delivery, if the Lessor insists?

Thank you for your advice and suggestions.

$75 may be the going rate, but I've seen $100 in that same township recently so I'd shoot for that and good lease terms. As for the draft, 15 days is shorter than many, which is good, but it also probably gives them the ability to "wiggle out" of paying you for almost any reason. Read the fine print, if any. The only reason acceptable to me for a lessee not to pay would be if they find during their 15-day title check period that you don't own the minerals they are trying to lease.

To answer your question though, yes, if you insist on a check or wire payment on delivery many will do that as long as they are comfortable that you own the minerals. The draft gives them time to verify your title before paying, which is why many companies use them.

Two other options to make the draft more bearable:

1. You could set it up so you attorney would hold the executed lease until the draft is paid off, rather than sending the original lease back to the lessee after depositing the draft in your bank.

2. You could deposit both the lease and draft with your bank's collection department instead of sending the lease back to them and depositing only the draft. That is supposed to ensure (if their bank does it right) that the lessee won't get the original lease handed to them until the draft is paid off. Still doesn't guarantee they'll pay the draft. Just guarantees they won't get the lease until they do. Same with the attorney option above.

If you want to simply exchange lease for check immediately then ask them if they'll do it that way. Perhaps if they're comfy with your title already they'll be able to send a landman to meet you in person with a check and you could give them the lease then. They're not going to pay you until they've had time to verify your title however.

I've used all these options over the years. It just depends on what you can negotiate. Often the draft method is fine, as long as you feel confident enough in the company writing it that they will pay once it's due, assuming there are no title issues.

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


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Frederick M. Scott


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.


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.

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

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

Certified Mineral Manager (CMM), Registered Professional Landman (RPL)

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