Interesting dilemma Joe,
If you could get a real player to sign a 180 day and 1mm non perform. I would venture to guess it will have been about one of the best deals you have ever made. If I were a mineral owner I believe I would want some thing to happen fairly quick and so I would think very carefully about the term. I would ask for less of a bonus and less of a term if that is what it takes to get em drilling, hold on to an acceptable royalty of course which in the long run is the most important.. A lot of folks loose sight of the long term and focus more on what can I get up front. There are many alternatives and ways to engineer deals that will be equitable to all involved. The devil is in the details.
Joe, you are well versed in this regard and will do fine.
Thanks for you input and advice.
I wish you well in your dealing with the people you are working with. I think if they are reasonable and know what was happening in the industry at the time CHK leased them then they may change their mind.
I had an offer this week of $50 per acre with an option to extend the lease for 5 years for $150. This land is in Rapides Parish, east of LSUA.
Interesting David, but I am not sure where LSUA is. Can you share any more info?
About 3 or 4 miles South of Alexandria on Hwy 71/167.
Lawyer Polk in Alex was offering these which were actually options to lease, this just ties up your minerals while they shop around for a buyer. I would not take the deal.
Charles, Pride has been making this same offer. I don't feel like they are shopping the deal. They are working for someone but I could only speculate as to who they are working for. I was told by a good source that they are not working for Anadarko. They have been leasing in Avoyelles Parish for quite some time and only recently moved into Rapides.
I wonder what your royalty is David???
I did not take the offer at this time, but the royalty offered was 20%. Thanks for all of your information.
David, thats the first activity I've heard about in your area keep us in the know. Most of my family's land is three miles south of you, 2N 1W, Leased timberland in 1N 1W but could not generate interest in adjoing farmland up one Township.
A slightly better offer in rapides parish-not much better-the same $50 per acre with a 3 year option of $200 per acre and an additional extension of 2 years for $200 per acre also the same 20% royalty which seems in my mind to be the deal breaker.