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Oil/Gas/Mineral Interest Lease


I recently received a mineral lease proposal in Oklahoma from NTX for $225.00 per net mineral Lease Bonus ($225.00x5.835) =$1,312.88, 3 Yr paid-up, Lease term, 2 yr option @ $325.00/acre, and 3/16th Royalty Interest. In negotiatons they have raised their prices to $400.00 per net mineral, 2 yr option @ $425.00/acre, and 1/5 royalty. I had requested the Favored Nations Clause and they denied it. The property is in Jefferson County, Oklahoma:  70.00 gross acres, Sections 12,TO5S,RO4W. Should I hold out and see if they change on the Favored Nations Clause or sign or not sign the deal at all?

I doubt they'll budge on the Favored Nations unless they really need your lease badly, which they likely don't. In Oklahoma it is fairly easy for them to just force pool you into their drilling and spacing unit if they can't reach an agreement to lease with you (though in most cases a company would rather lease than force pool a mineral owner.)

I don't think $400 is a bad offer, especially with a 1/5 vs. 3/16 royalty. I would however try to limit the lease to three years by excluding their extension option from the deal. Lease prices could be higher than $425/acre by then. You never know. I hate to leave my stuff tied up for more than three years.

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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