Mineral Rights... Help!

[J]

I've been contacted by a company wanting to lease the mineral rights to my property. I don't know the whole scoop right now, but I will look at it and give ya'll more info on it later.

What is your opinion on this?

I have a real problem with someone else having any kind of right to my property. For instance when I was looking to buy my land if I came across a piece that had some kind or restrictions on it I quit looking at it.

This just seems like one of those too good to be true situations.
What do you think...?

 

[bigbull338]

just what kind of mineral rights are they wanting to lease.oil gas coal what.theyve leased the oil rights to our place a few times.how meny yrs is the lease for.scott

 

[J]

On the number of years not sure yet my wife called me at work to tell me about it. She told the man that he would have to talk to me about it because she knows how I am. I know a man that leased his in Clifton and if I'm not mistaken it's a yearly lease.

The lease would be for natural gas.

 

[bigbull338]

id call the man an talk to him.an if you lease to him make sure he leases your whole place,an make sure they put in the lease that they clean things up.if they drill for gas on your place.scott

 

[J]

I plan on calling him and getting a whole lot of info from him. I'm pretty familiar with well driling, mainly water, but have thought about cleanup and that sort of stuff. I assume they would lease the entire place since they are snatching up all the land mineral rights in the area.
I will also probably have an attorney look through it to make sure all is good.


Thanks bigbull338.

Anyone else???

 

[Arnold Ziffle]

You need to get with an attorney (or possibly some "industry" person), but somebody that really knows what they are doing with respect to mineral leases. Many issues to consider, such as the prevailing lease bonus $$ for your area, percentage of royalty interest going to you as landowner, term of lease, delay rentals and shut in royalty provisions, clean up provisions, issues relating to gas marketing & compression charges. Also, address specifically what is excluded from mineral exploitation. You might not mind an oil or gas well (most folks salivate at the thought of getting some of that "mailbox money") but I bet you sure wouldn't want to give them the right to strip mine for lignite without realizing it. ;-)

And make sure you realize the difference between entering into a contract to lease them the property for specified term and purposes -- versus selling them perpetual mineral rights.

 

[Conagher]

AZ is right - Proceed with caution. This site might help: http://www.naro-us.org/discus/messages/9/9.html

Good Luck.

 

[Dad at the Ranch]

I am not sure where you are located in central Texas but are you aware the largest gas well find ever is not far from Alliance airport? I dito the same as many others have said, find good advise! Remember you don't go to a family doctor for heart or brain surgery, go to a specialist in the oil and gas business.

 

[brokenmouth]

get an oil and gas lawyer to look at it dont trust what the cover letter says and dont be blinded by any sight draft that comes along with the offer . read everything before you sign and if you dont understand it hire a lawyer. and whatever you do dont sign any kind of deed.

 

[J]

get an oil and gas lawyer to look at it dont trust what the cover letter says and dont be blinded by any sight draft that comes along with the offer . read everything before you sign and if you dont understand it hire a lawyer. and whatever you do dont sign any kind of deed.

NO WAY would I sign a Deed! I'm already leary of the whole thing. I will do my homework and try to keep everyone updated on what happens with it. Thanks for all the advice.

 

[jersey lilly]

ARe you located on the Austin Chalk? That's the name of this latest "big" pocket of gas . They came thru here about 7 years ago leasing for 5 years. they've drilled a few wells here and there, hit some good and some bad, but what we were told they are still drilling the perimeter to find out where it's at exactly. There's nothin wrong with leasin to oil companies, just make sure it's lagitamate and correct. Talk to an attorney, it'd probably make you feel better. Just because they lease does not mean they will drill. They haven't touched our place even though we were told back then that the gas pocket is huge. Not only do you want it in the contract that they clean up. You also want it stated that they will fence off any and all sludge pits, water sources so that your cattle can't get to them. they will clean all that up after the well is dug if they dig one. They are also doin horizontal drilling. which means you may not get all the proceeds, they may drill the actual hole on your land, but slant off under one of your neighbors places. If they dont lease, they dont get any money.

 

[milesvb]

ARe you located on the Austin Chalk? That's the name of this latest "big" pocket of gas . They came thru here about 7 years ago leasing for 5 years. they've drilled a few wells here and there, hit some good and some bad, but what we were told they are still drilling the perimeter to find out where it's at exactly. There's nothin wrong with leasin to oil companies, just make sure it's lagitamate and correct. Talk to an attorney, it'd probably make you feel better. Just because they lease does not mean they will drill. They haven't touched our place even though we were told back then that the gas pocket is huge. Not only do you want it in the contract that they clean up. You also want it stated that they will fence off any and all sludge pits, water sources so that your cattle can't get to them. they will clean all that up after the well is dug if they dig one. They are also doin horizontal drilling. which means you may not get all the proceeds, they may drill the actual hole on your land, but slant off under one of your neighbors places. If they dont lease, they dont get any money.

You can't get pooled into a drilling unit if you don't lease but the railroad commission sets field rules that dictate how close the wellbore can get to acreage not in the unit. You may be able to stipulate that ALL of your acreage be included in any unit formed but that can backfire as well and you could get left out completely if the wellbore is far enough from your property line. They have to allocate a certain number of acres for the length of wellbore depending on the field rules for the chalk formation they drill into. You may be leased but never see any royalties because you weren't pooled in but hey, even the lease money is found money. Pay attention to the royalty percentage that they pay out, it can be negotiable and is usually expressed as 1/8 or 1/16, etc.