Gulfport lease

I wanted the lease to be at the wellhead with no deductions but they won't budge.

here's what they are offering generic boiler plate lease. Should I take it or leave it?? I only have 10 acres.

PAYMENTS TO LESSOR. In addition to the bonus paid by Lessee for the execution hereof, Lessee covenants to pay Lessor, proportionate to Lessor's percentage of ownership, as follows:
(A) DELAY RENTAL: To pay Lessor as Delay Rental, after the first year, at the rate of five dollars ($5.00) per net acre per year payable in advance. The parties hereto agree that this is a Paid-Up Lease with no further Delay Rental and/or Delay in Marketing payments due to Lessor during the primary term hereof.
(B) ROYALTY: To pay Lessor as Royalty, less all taxes, assessments, and adjustments on production from the Leasehold, as follows:
1. OIL: To deliver to the credit of Lessor, free of cost, a Royalty of the equal __twenty________ percent (_____20_____%) part of all oil and any constituents thereof produced and marketed from the Leasehold.
2. GAS: To pay Lessor an amount equal to _______twenty__ percent (______20__%) of the revenue realized by Lessee for all gas and the constituents thereof produced and marketed from the Leasehold, less the cost to transport, treat and process the gas and any losses in volumes to point of measurement that determines the revenue realized by Lessee. Lessee may withhold Royalty payment until such time as the total withheld exceeds fifty dollars ($50.00).


Market Enhancement Clause: It is agreed between the Lessor and Lessee that, notwithstanding any language herein to the contrary, all oil, gas or other proceeds accruing to the Lessor under this lease or by state law shall be without deduction, directly or indirectly, for the cost of producing, gathering, storing, dehydrating, transporting and marketing the oil, gas and other products produced hereunder to transform the product into marketable form; however, any such costs which result in enhancing the value of the marketable oil, gas or other products to receive a better price may be deducted from Lessor’s share of production so long as they are based on Lessee’s actual cost of such enhancements . 

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Permalink Reply by pat on April 7, 2014 at 6:05pm

thats a bad lease. my lease was drawn up by an attorney and its 24 pages long. we pay no production cost at all. $5.00 an acre is not worth your time. you should be able to find someone else.

Permalink Reply by adam sorell on April 7, 2014 at 6:34pm

how much  should it be? the bonus offered is $7200/acre

Permalink Reply by pat on April 7, 2014 at 6:39pm

youll get hammered in production cost. 7200 isnt bad though.

Permalink Reply by Kevin in Belmont County on April 7, 2014 at 6:58pm
I would not sign a lease without a "Pugh Clause". This lease allows them to hold on to your acreage until they are ready to drill. The yearly rental amount is a joke! I would tell them to go pound sand!
Permalink Reply by Travis Keefer on April 9, 2014 at 8:28am

This is a paid up lease, you wont get anymore than the bonus payment and royalties. Something to consider, gulfport's wells have been some of the tops in the area and you don't see anyone on here complaining about gulfport screwing them on their royalties. . . .just my opinion

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