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Oil/Gas/Reeves county lease extension


My family owns 100 net mineral acres in section 25, block C1, PSL survey, Reeves County, Texas
Our lease will expire in two and a half months but we were offered a three year extension for $1200. Per acre.
This company has had the lease for almost 5 years and tell me they have not drilled a well yet because the title has many problems. I'm 71 years old and would like to see a well drilled before I'm too old to enjoy the royalties, if any. A very good well has been drilled in the adjoining section to the north.
What should I do? What if we just let the lease expire and see what we would be offered by a new company?
I think a 3 year extension is too long. Maybe agree to 18 months?
Thank you very much for your time.

I would agree that 18 months is better though they might not offer you as much cash for a shorter renewal period. If a really good well was drilled next door then I think there would be others interested in leasing your mineral rights, but you seem to have a "bird-in-the-hand" with your current lessee so I'd try to work something out with them if you can as there is no guarantee anyone else would be interested. If you have time however, you could contact or visit the local abstract office in that county and see if any other companies are buying leases near you currently. If so, you could contact those companies and see if they would give you a better offer.

If your current lessee insists on lowering the bonus for an 18-month lease, you may be able to get them to agree to more royalty instead, or at the least have them insert an "escalating royalty" clause into the lease stating that once they recover their drilling costs (i.e. "after payout") your royalty would increase from 3/16 to 1/4 etc. from that point forward.

If the area is truly "hot" right now, then I expect you probably do have some negotiating power with them, especially since you own an entire 100 acres it seeems.

I wouldn't be surprised if there really were title problems delaying their plans.

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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