Question Hi Mr. Scott. My 2 brothers and I collectively own 130 acres of minerals in 32/05N/14E in Pittsburg Co. OK. In 2007 we leased to Continental Resources for $650 per acre. In 2010 we leased again for $750 per acre. Our lease expires in April 2013. Our last conversation with Continental (Dec. 2012) was they were not interested in renewing due to low natural gas prices. Previously, they were paying us 25% early to lock in the lease and the remaining 75% when the lease was actually signed. As the time for the lease to expire nears, I am wondering what other companies are leasing in that area and if we should try to market our minerals to some other companies. I know we cannot expect to get the amount we have in past years due to the market, but I'm also not so sure there isn't a company out there who would be interested. Last question - I know 3 years is the standard lease term. Can it be negotiated for a shorter time so if the market turns around we wouldn't be locked in to a low price for so long? Thanks for any assistance you can give us with these questions!
Answer The most recent leases I see filed in your section 32-5N-14E were filed in 2010 so it's unlikely you'll find anyone wanting to lease those currently. Continental was the major buyer back in 2010 as well. Bearcat Land (leasing for some oil company) did buy some leases in adjacent section 28 last year. You could check with them to see if they're interested in yours but if they were you'd probably have been contacted by now.
You can also check out my leasing tips article on the Mineral Hub if you like, which might help you in any negotiations you find yourself in in the future. It also explains options such as shortening the primary term as you expressed interest in doing above.
Hope this helps you out.
Frederick M. "Mick" Scott CMM RPL
www.mineralhub.com The Mineral Hub
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.
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)